October 31, 2023
MANILA -The government’s export target of $126.8 billion for 2023 is unlikely to be reached given the year-to-date performance and amid global economic headwinds that are holding back the sector, according to the country’s largest exporters group.
Philippine Exporters Confederation Inc. (Philexport) president Sergio Ortiz-Luis Jr. estimated that the country’s export performance could fall “very far off” the mark.
“Many things have happened and there are still many challenges: supply chain problems and disruption. I doubt we can meet the target,” Ortiz-Luis told the Inquirer in a phone interview.
For instance, the Philexport official said the impact of the ongoing Russia-Ukraine conflict continued to affect the global supply chain, leading to delays and added costs for exporters worldwide.
Middle East conflict
Asked whether he sees the situation in Israel also posing similar problems, he responded in the affirmative, but cited that the industry had yet to feel the full impact of the conflict.
“There will be an effect but we don’t know the extent yet,” he said.
Ortiz-Luis also cited the rising tensions between the Philippines and China over territorial dispute in the South China Sea. Some businesses were concerned that it might escalate, he said.
In the updated Philippine Export Development Plan, which was launched in mid-June this year, the government has set an export target of $126.8 billion this year, a growth of 46.64 percent over 2022 level, hoping that trade policies, programs and coordination with business groups would help achieve the goal. Actual export receipts last year amounted to $78.84 billion.
Disappointing 1st 8 months
However, preliminary data from the Philippine Statistics Authority released three weeks ago showed that the country’s export earnings from January to August stood at just $47.81 billion, marking a 6.6-percent drop from the $51.18 billion recorded in the same eight-month period in 2022.
The Philexport official also pointed to the downturn in electronics exports, the country’s top export group, as another factor behind his muted outlook.
Back in September, Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi) president Danilo Lachica said the industry group revised its projection from a 5-percent growth to a “flat” performance this year after seeing a weaker-than-expected second quarter results.
According to Seipi’s records, electronics exports dropped by 6.99 percent during the first half of the year to $21.19 billion from $22.78 billion in the same period last year.
Lachica attributed the weak performance to the detrimental effects of the geopolitical and trade conflicts involving the United States, one of their top export destinations, and China, as well as the difficulties caused by conflict between Russia and Ukraine. INQ