EXPORT earnings could still experience single-digit growth next year despite not being able to hit the target set in the Philippine Export Development Plan (PEDP) 2023-2028 for this year, a setback attributed to a “changing geopolitical situation,” according to the Philippine Exporters Confederation Inc. (Philexport).
Philexport President Sergio R. Ortiz-Luis Jr. said that, while the sector did not meet the $126.8-billion exports target for 2023—the projection set in the PEDP—it is still possible for Philippine exports to grow by single-digit in 2024.
“Possible. [It’s really] most probably single-digit growth. Because if we had hit double-digit, we can meet the $126 billion,” Ortiz-Luis told reporters on the sidelines of the opening of the ceremony of the National Exporters’ Week on Monday in Pasay City.
Instead of aiming for the initial target set in the country’s export development plan, the Philexport chief said, “We are just gunning for $100 billion [for this year], that’s a big thing already,” adding that it might take the country’s exports two years to hit the $126.8 billion.
But for the 2024 performance, Ortiz-Luis remains optimistic of the country’s exports, saying, it’s “Always better. I think we are outpacing even our neighbors in terms of growth rate, it’s just that their base is already so substantial.”
However, the head of the umbrella organization of Philippine exporters noted the change in the dynamics of the growth drivers of exports for next year, as he noted the decline in exports earnings of the semiconductor industry this year.
“Well, semiconductors are a big [part of our exports], and they don’t expect to meet their original target; so it’s services that will make up for it,” he stressed.
Last week, Semiconductor and Electronics Industries of the Philippines Inc. (Seipi) President Danilo C. Lachica said in a televised interview that the industry revised this year’s projection from flat to a decline of around 9 to 10 percent in exports, compared to the industry’s $49-billion export sales in 2022.
The Seipi head noted that the board decided to lower the industry’s growth projection for this year on the back of inventory correction issues and the global headwinds.
With these developments in the export landscape, Ortiz-Luis noted the challenges that continue to hound exporters. These, he noted, are inflation and salary increases which he said threaten small exporters as well as investors.
“Well, it’s inflation and the threat of the salary increases that exporters are anxious about; investors are turned off because they don’t know what will happen next,” the Philexport chief said.
For her part, Department of Trade and Industry-Export Marketing Bureau (DTI-EMB) Director Bianca Pearl R. Sykimte divulged to reporters that they have to discuss the recalibration of targets set in the PEDP 2023-2028 after the Exporters’ Week.
She pointed to the “volatile” international trading environment as the culprit behind the changing of the exports targets set in the exports development plan.
“Well, admittedly the international trading environment has been very volatile. So the emphasis of PEDP is really developing agile exporters. So we cannot really predict what will happen in the future but what’s crucial is that exporters get competitive so they can easily adjust to whatever opportunities and threats,” Sykimte said, partly in Filipino.
In recalibrating the exports target, the Trade official said they will take into account “economic growth in our markets as well as their forecasted imports and of course our supply capability.”
Sykimte noted, however, that the strategies indicated in the Plan would remain to be “industry development-centric.”
“And it’s now reflected in the structure of the DTI where we really marry industry development, trade promotion and of course investment promotion,” she added.
In 2022, the reaped about $98 billion worth of export earnings from services and goods. (Related story: https://businessmirror.com.ph/2023/11/06/govt-to-miss-2023-exports-target/)