Philippines cuts export targets due to impact of COVID-19

MANILA – The Philippines lowered its 2022 export target to $ 103.9 billion from $ 130 billion, citing the impact of the COVID-19 pandemic.

The Department of Commerce and Industry (DTI) said Sunday that due to the disruptions caused by the outbreak “it will be difficult to achieve our pre-pandemic goals” outlined in the Philippines Export Development Plan (PEDP) 2018-2022.

“Therefore, we had to adjust our projections based on the various input from industry stakeholders as well,” said Commerce Secretary Ramón López.

The new projection is a “fight objective”, since it is “higher than the $ 86 billion established by the Development Budget Coordination Committee (DBCC),” López said.

The travel goods, clothing and wood industries were hit the hardest by weak global demand and a decline in production due to lockdown restrictions, DTI said.

By 2020, exports of goods and services are forecast to decline 14.7 percent to $ 80.5 billion. This was a downward adjustment from the target of $ 105.8 billion for 2020 before COVID-19.

But exports are expected to grow 12.4 percent to $ 90.5 billion in 2021, which is also lower than the previous goal of $ 117.3 billion for the year.

DTI expects exports to recover after the approval of reforms such as the Corporate Recovery and Tax Incentives for Companies Act (CREATE) and the extension of the Bayanihan Act 2.

Electronics shipments, which account for more than half of annual exports, are expected to decline 7 percent this year, but rebound in 2021 by 7 percent driven by semiconductors, DTI said.

Services exports will grow 17.1 percent in 2020, 11 percent in 2021 and 14.8 percent in 2022, thanks to the constant business process outsourcing (BPO) sector and the expected recovery in goods and travel-related services when the vaccine arrives.

Exports estimated to have grown in the past year include auto parts, minerals such as copper and nickel, fruits and vegetables, and basketry.

López said that the DTI will focus on the recovery of sectors with greater opportunities such as high-value electronics, automotive and electric vehicle parts, processed foods, minerals, other minerals, IT-BPO and creatives.

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