WHILE Philippine merchandise exports are expected to end 2017 with a growth of over 20 percent, the United Nations Economic and Social Commission for Asia and the Pacific (Unescap) said this strong growth may not spill over to 2018.
In the Asia-Pacific Trade and Investment Report 2017, Unescap said the country’s merchandise exports in terms of value is expected to post an average growth of 22.5 percent this year and 7.1 percent next year.
The value of the country’s merchandise imports, meanwhile, is projected to post an average growth of 16.6 percent in 2017 and 5.5 percent in 2018.
“To countries previously affected by the slowdown of GVCs [global value chains], such as the Republic of Korea and the Philippines, the demand recovery is encouraging,” Unescap said.
“Although the improved performance of global and regional trade during the recent period is not negligible, several factors point to the moderation of trade growth in 2018,” it added.
In terms of volume, merchandise exports is seen averaging 13.1 percent this year and 6.2 percent next year. Imports, meanwhile, are forecasted to post an average growth of 14.9 percent in 2017 and 6.5 percent in 2018.
Compared to some members of the Asean, the Philippines is either the highest or among the highest in export and import growth.
The country leads in the value of merchandise export growth this year and next year followed by Malaysia with 13.9-percent growth in 2017 and 6.9 percent in 2018.
In terms of the value of merchandise-import growth, the Philippines is second to Thailand, which is expected to post a growth of 16.9 percent in 2017. The country comes in third in terms of import growth in 2018 after Malaysia at 7.2 percent, and Vietnam, 5.7 percent.
Unescap estimates also showed the country leading in terms of the volume of export and import growth this year. However, the country comes in second to Malaysia’s 6.9 percent in terms of import volume growth next year.
“First, the robust trade growth in 2017 was measured against the weak performance in 2016. Second, risks threatening the world economy remain in place and could undermine the process of trade recovery,” Unescap said.
“Structural factors that have contributed to weak trade performance since the 2009 economic crisis persist,” it added.
The Unescap said export growth is forecast at 4.5 percent for 2017 and foreign direct investment is also expected to rebound this year, building upon fast growth in greenfield investment in 2016 and continued investment liberalization.
The report stated that the expected growth of exports by developing Asia-Pacific economies is 4.8 percent, while that by developed countries in the region is 3.3 percent.
In terms of export volume, Unescap said the Asia-Pacific region in 2018 will grow more modestly than in 2017 at 3.5 percent, while the import volume will increase by less than 3 percent.
“Export and import prices, especially commodity prices, are not likely to increase and, in fact, may trend downward due to the potential slowdown of investment and consumption precipitated by rising uncertainties. The sluggish prices will cause trade value in 2018 to grow much slower than in 2017,” Unescap said in a news statement.
“At the same time, deepening uncertainties may also affect extent of investment liberalization, which is found to increase GDP by $19.5 billion annually while decreasing inequality in the region by 0.02 percent per year,” it added.
The Asia-Pacific Trade and Investment Report is the flagship publication of the Unescap, which is prepared by its Trade, Investment and Innovation Division.
It provides information on and independent analyses of regional trends and policy developments in trade in goods and commercial services, as well as foreign direct investment.
It also provides insights into the impacts of these recent and emerging developments on countries’ abilities to meet the challenges of achieving sustainable development.