‘Philippines exports on path to strong recovery’

MANILA, Philippines — The Philippines is expected to post a strong rebound in merchandise exports this year due to low base effects and  resurgence of  global demand as economies recover from the pandemic-induced slowdown.

In its latest trade outlook, market intelligence firm IHS Markit said the Philippines may post a 17 percent increase in exports this year, coming from a 10 percent contraction last year.

IHS Markit’s latest forecast is way above updated government targets for goods and services exports at eight percent and six percent, respectively.

In April alone, the country’s exports jumped by 72 percent with a majority of export destinations already posting increments.

IHS Markit Asia-Pacific chief economist Rajiv Biswas said the strong rebound in global economic growth in the first half   has driven a significant upturn in regional merchandise exports.

“Over the medium-term outlook, Asia-Pacific exports are expected to grow at a rapid pace, helped by the sustained strong growth of intra-regional trade within the region, as China, India, and the ASEAN continue to be among the world’s fastest-growing emerging markets,” Biswas said.

Among the emerging markets in the region, Indonesia will see the strongest growth at 24 percent followed by Japan’s 20 percent and Singapore’s 18 percent.

IHS Markit estimates that the Philippines will see a higher increase than the expected uptick in exports of China, South Korea, Malaysia, Vietnam and Thailand.

Biswas said the rapid growth of Asia-Pacific exports would also be strengthened by a wide range of bilateral and multilateral trade liberalization initiatives that have either been implemented or are planned in the region.

“The rebound in economic growth in advanced economies such as the US, the UK, the European Union and Canada, combined with continued momentum in China, are linked to the rapid rollout of vaccination programs. This has supported improving Asia Pacific new export orders to key export markets in North America and Europe,” Biswas said.

While improvement in the export of goods will be much faster this year, the same cannot be said in the export of services.

Biswas emphasized that the region should expect a more protracted and gradual recovery path for trade in services for many economies.

This is amid the resurgence of COVID-19 cases in some countries, like the Philippines, which will still make international travel a major impediment to recovery of tourism in the region.

“The reopening of international travel is expected to be more selective in the region, on a bilateral basis between countries that have implemented widespread vaccination programs,” Biswas said.

“The path of Asia Pacific export recovery is likely to be uneven across different industry sectors, with manufacturing and commodities exports leading the recovery, while some service sector exports such as the tourism and commercial aviation sectors are expected to have more gradual recovery paths,” he said.