Nearly 4,000 exporters have stopped shipping their products to other countries due to lack of supply, geopolitical reasons and market challenges, according to officials of the Department of Trade and Industry (DTI).
At the 2023 Data Dissemination Forum on International Merchandise Trade Statistics (IMTS) organized by the Philippine Statistics Authority (PSA) on Monday, DTI-EMB Director Bianca Pearl R. Sykimte said the number of exporters in 2022 is just roughly half of the figure in 2018.
“Nearly 4,000 exporters stopped exporting in the last five years,” said Sykimte.
Asked about the reasons behind this, Philippine Exporters Confederation Inc. (Philexport) President Sergio R. Ortiz-Luis Jr. told the BusinessMirror that most of these exporters are in the food sector and they stopped because “there is a lack of supply.”
“Marami…mostly ‘yung some of the food exporters because there is a lack of supply. So maraming huminto. Maraming pumasok na bago pero yung mga old-timers marami ang huminto,” he said.
Among the old-timers, he said a lot of these exporters stopped due to geopolitical reasons, cost of doing business and the tough business environment.
In terms of ease of doing business which he considered a domestic reason, Ortiz-Luis said, “The transportation, shipping, at marami ang naghinto dahil sa LGU [local government units] ‘yung tinanggal ngayon [na pass-through fees]. Also, ‘yung gastos sa pier masyadong mataas.”
He said, however, that the suspension of pass-through fees may encourage some businessmen to start exporting again. “It helps. It’s only one of the reasons but it would help.”
Executive Order (EO) No. 41 was signed by President Ferdinand R. Marcos Jr. last September 25. This measure prohibits the collection of the fees on national roads and “urges” LGUs to suspend the collection of fees on vehicles transporting goods.
Sykimte also noted that the number of products that the country exports “has more or less stagnated” while the Philippines’s competitors continued to “diversify” both their products and their markets.
“Our trade deficit is ballooning and the share of Philippine exports to GDP is decreasing,” she added.
While export revenues were higher than prepandemic levels in 2021 and 2022, “muted” economic growth in the country’s key markets, high inflation and geopolitical tensions prevented the Philippines from achieving its targets.
Last week, Ortiz-Luis Jr. said Philippine exporters would no longer meet the $126.8-billion exports target for 2023 that is indicated in the Philippine Export Development Plan (PEDP) 2023-2028. He said, however, that it is still possible for Philippine exports to grow by single-digit in 2024.
Sykimte had said the government would face difficulties hitting the exports target for 2023 as it was set at a time when inflation and geopolitics were stable and before China posted a less favorable economic recovery.
“These are the realities that we need to face as we implement the Philippine Export Development Plan in the next five years,” she added.
Sykimte said the agency has been sharing these key data “not to weaken our spirits or weaken our resolve to help our export sector but to raise the alarm bell that we should do more because our exports sector is capable of achieving more and we are capable of doing more for this sector.”
The director of the export marketing arm of DTI said this as “the Philippines lags behind most of its Asean competitors in almost all sectors from resource-based, low, medium, and high-tech sectors.”
Meanwhile, the Trade official also underscored the importance of the Philippine Development Plan (PDP) 2023-2028, which the National Economic and Development Authority (Neda) defined as a “plan for deep economic and social transformation to reinvigorate job creation and accelerate poverty reduction by steering the economy back on a high-growth path.”
“The Philippine Development Plan 2023-2028 also recognizes the importance of evidence-based policymaking in achieving outcome one in the strategy framework to promote trade and investment—that is global position of philippine exports restored, sustained and strengthened by proactively monitoring and implementing preventive measures and interventions for distressed firms,” Sykimte said.
Sykimte said the DTI is hoping to further strengthen its partnership with the PSA in pursuing an “evidence-based” export development strategy so they can “dramatically” change the trajectory and propel Philippine exports.
Within the Asean region, Sykimte said the performance of the country’s competitors can also serve as an inspiration for the Philippine export community. Despite the issues hounding local exporters, she said the Philippines can still be an “agile” export powerhouse in the region.
“If Vietnam was able to leapfrog and surpass four Asean member-states in terms of merchandise exports to become the second largest exporter in Asean in a span of just 12 years, we have confidence in our people and the entire exporting community that the philippines can be an agile export powerhouse,” she said.
At the National Exporters’ Week which was held last week, Sykimte said that along with the Export Development Council (EDC) and the Philexport, they have to discuss the recalibration of export targets set in the PEDP.
“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,” she said, partly in Filipino.
In 2022, the country’s export revenues from services and goods reached $98 billion.