Exports gloomy amid weak foreign demand

CEBU, Philippines — The Philippine Exporters Confederation (Philexport)-Cebu is seeing continued low foreign demand for Filipino goods as exports continued to contract in June.

Philexport-Cebu executive director Fred Escalona said the exports sector is still in "a gloomy scenario" whether or not "it is Cebu or the whole country in general."

"The main reason is the lack of foreign demand as can be seen in the number of export documents processed through our one-stop shop," the export official told The FREEMAN in an interview yesterday.

Official data released yesterday showed exports fell 0.1 percent to $5.7 billion in June compared to the same month last year while imports rose 24.2 percent to $9 billion.

The country posted a trade deficit of $3.35 billion in June, but this was lower than the $3.7 billion deficit in May but was higher than $1.59 billion during the same month in 2017.

The government has said its infrastructure buildup program has driven more imports, widening the trade deficit and keeping the peso at its P53 level as demand for dollar rises.

"Except for January and April which were flat, the rest of the months in the first semester remarkably registered a combined loss of around 9.1 percent compared to the same period in 2017," Escalona said.

The Philexport official said he still sees that August exports will be flat "but hopefully the market will rally in the last four months of 2018 in line with the predictions of trade experts."

"For export entrepreneurs it is a kind of 'double whammy.' Revenues are down and cost of labor has increased. I have already heard of 'right-sizing' in export companies in order to survive during these uncertain times," he further emphasized.

However, Escalona remained optimistic the exports industry will eventually recover as part of economic cycle.

"Of course I still believe that we will get out this situation eventually. This is just part of economic cycles which occur every 5 to 7 years. Our economy is strong and there are many opportunities locally. We just have to readjust our marketing mix," he pointed out.

The Philippine government has been urged double its efforts in marketing the country’s export products to international consumers

Short-term measures to boost trade may include providing government support to promising export products whose demand is growing apace.

This may include easing of government regulation, strengthened market intelligence gathering in partnership with the private sector, and maximizing the opportunities of trade agreements and economic groupings particularly within the Asian region.

Exporters are likewise encouraged to innovate and improve export quality and that the Department of Trade and Industry should provide more access to testing, certification and accreditation facilities that will facilitate domestic compliance with international quality standards.

The government is looking to increase the share of Halal goods to 11 percent of total exports through the recent establishment of the National Halal Certification Scheme.

There is also a need to intensify the efforts of the country’s trade missions abroad, including business-matching initiatives in order to create new markets for Philippine-made goods.