[ad_1]
AFTER suffering double-digit losses due to the pandemic, the government has decided to cut export projections through 2022 by a fifth to $ 103.9 billion, from the original $ 130 billion.
In a statement Sunday, Commerce Secretary Ramón M. López announced his agency’s decision to lower the medium-term export targets set out in the Philippine Export Development Plan (PEDP) 2018-2022. From a range between $ 130 billion and $ 122 billion, exports of goods and services are now expected to reach $ 103.9 billion by 2022.
“Since Covid-19 disrupted several business models, it will be difficult to achieve our pre-pandemic goals; therefore, we had to adjust our projections also based on the various contributions from our industry stakeholders, ”López explained.
According to López, the decision to cut export figures was due to weakened demand for goods. Overall, he said travel goods, clothing and wood products were hit the hardest due to the change in consumer appetite and declining production.
“The new projection can also be seen as a fighting target for DTI [Department of Trade and Industry], given the challenges of the pandemic and the emergence of new strains, and given that this is higher than the $ 86 billion established by the Development Budget Coordination Committee ”, added the head of Commerce.
According to the DTI forecast, shipments of goods and services will fall 14.7 percent to $ 80.5 billion in 2020, then grow 12.4 percent to $ 90.5 billion in 2021; and then expand by nearly 15 percent to $ 103.9 billion in 2022. DTI’s Office of Export Marketing reviewed the numbers Lopez was looking for to adapt to changes in the business environment.
Electronic products will continue to account for more than half of merchandise exports, as the industry sees growth of 7 percent by 2021.
On the other hand, exports of services will be largely carried out by the business process outsourcing (BPO) industry. The sector faces a growth of 3.5 percent by 2021 due to the rebound in demand for health information, content development and creative products.
For López, the export sector may rebound in the next two years if companies take advantage of the tax advantages offered by the Corporate Recovery Act and Tax Incentives for Companies (CREATE), as well as the extension of privileges in the Bayanihan to Recover as One. Act or Bayanihan 2.
The CREATE Act lowers the corporate tax rate to 25 percent, from 30 percent, which used to be the highest in Southeast Asia. On the other hand, it reforms the menu of tax incentives from which investors choose when locating in the Philippines.
“It takes a nationwide approach and greater support for the private manufacturing and service industries and academic collaboration to work toward achieving established fighting goals,” Lopez concluded.
