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It is necessary to IMPLEMENT reforms to “remove obstacles” to investments to boost the performance of the country’s foreign trade, according to the National Authority for Economy and Development (Neda).
Data released by the Philippine Statistics Authority (PSA) on Thursday showed that exports contracted 2.2 percent in October 2020 after registering growth of 2.9 percent in September 2020.
Imports also saw a deeper 19.5 percent contraction in October 2020 from the 15.3 percent drop in September 2020. Imports have been contracting since May 2019.
“The improvement of the communications infrastructure to promote investments in digital solutions and services, as well as logistics reforms, such as the rationalization of the cargo system, the establishment of strategic warehouses and cold chain systems to reduce costs and improve competitiveness of manufacturers and exporters, it will be a key factor in ensuring a recovery of the country’s commercial sector, ”said the acting secretary of Socioeconomic Planning, Karl Kendrick T. Chua, in a statement.
Chua said Neda continues to partner with relevant agencies and the legislature to push through proposed amendments to the Public Service Law to open up opportunities and stimulate investments in critical infrastructure that can increase the productivity and competitiveness of exporters, as well as improve access to online platforms. for business and government services.
These reforms, Chua said, include the gradual and calibrated resumption of business with strict implementation of health and safety protocols that remain crucial to revitalizing the economy.
He added that improving the general climate for businesses to foster entrepreneurship and competitiveness through the recent passage of the Corporate Recovery and Tax Incentives for Businesses (CREATE) bill will accelerate economic recovery by reducing our Tax Rate Company Income (CIT) and restructure the country’s taxation. incentive system.
Chua said that a fundamental characteristic of the law is that investment promotion agencies (IPA) continue to promote and facilitate trade and investment under the supervision of the Fiscal Incentives Review Board (FIRB), ensuring alignment with a regime unique tax incentive.
The bill also gives the government flexibility to grant performance-based, targeted, time-bound, fiscal and non-fiscal incentives to attract investment that results in significant job creation.
Neda said that he is continuing with legislative reforms, such as amendments to the Foreign Investment Law, the Retail Trade Liberalization Law and the Public Service Law.
Performance
The country’s total export earnings reached $ 6.2 billion, while import earnings amounted to $ 7.98 billion in October 2020.
Export earnings from January to October 2020 were estimated at $ 52.11 billion, a 12.5 percent contraction from $ 59.55 billion last year.
For imports, the total in the period from January to October 2020 amounted to $ 70.04 billion, representing a decrease of -25.2 percent compared to the import value of $ 93.61 billion recorded in the same period of 2019.
According to PSA data, the country’s total foreign trade contracted by 12.8 percent in October 2020, worse than the 8.2 percent falls in September 2020 and 4.6 percent in October last year. .
As both exports and imports performed worse than the previous month, the country’s trade deficit fell 50.3 percent in October.
The country’s main export market is the United States, which amounts to $ 1.01 billion or a 16.3 percent share of total exports for the month.
Other important export markets are Japan with $ 965.28 million or 15.6 percent of the total; China, $ 944.78 million, 15.2 percent; Hong Kong, $ 753.34 million, 12.1 percent; and Singapore, $ 398.07 million, 6.4 percent.
Chua noted that regional trading partners such as China and Asean posted double-digit growth in October. However, Chua said that more could be done to help speed up our recovery.
“As the traditional means of connecting buyers with suppliers are limited at the moment, the government and the private sector must work together to take advantage of digital platforms and alternative means to source and source from the country,” said Chua.
In terms of imports, China was the country’s largest supplier of imported goods valued at $ 1.95 billion or 24.4 percent of total imports in October 2020.
The country’s main import sources also include Japan with $ 876.46 million or 11 percent of the total; United States, $ 639.76 million, 8 percent; the Republic of Korea, $ 580.83 million, 7.3 percent; and Indonesia, $ 513.36 million, 6.4 percent.
Medical imports
The total value of the country’s imports of personal protective equipment (PPE) and medical supplies in October 2020 grew 27.3 percent to $ 20.55 million.
The import value of these medical items contracted 8.2 percent in September and 25.4 percent in October 2019.
“The annual increases observed in the following PPE and medical supplies raised the total import value of these items during the period,” said the PSA.
The articles are surgical masks with 1,112.5 percent; protective clothing, 562.5 percent; other masks, 180.5 percent; face shields, 73.5 percent; and test kits, 24.9 percent.
Month-over-month, the PSA said that the import value of PPE and medical supplies contracted 13.2 percent in October 2020 and 22.2 percent in the previous month.
The following contributed to the monthly decrease in the import value of personal protective equipment and medical supplies: face shields, which decreased by 74.8 percent; surgical masks, 48.8 percent; surgical gloves, 17.2 percent; and other masks, 8.2 percent.
However, it was observed that the import values of some commodities increased month by month in October 2020.
It is protective clothing at 27.5 percent; test kits, 3.7 percent; and safety hats, 2 percent.
