Philippines likely to miss exports growth target this year

MANILA, Philippines – The Philippines is unlikely to meet its exports growth target this year on account of the “Brexit” event and the country’s continuing political tension with China, an export industry official said.

From the government’s initial target growth of 6.6 percent to 8.8 percent for 2016, aggregate exports growth this year has been slashed more than half to three percent at the most.

“Lately we have been saying we can’t meet it so we’re looking at the lower end of the target as a six percent growth is very ambitious,” Philippine Exporters Confederation Inc. president Sergio Ortiz-Luis Jr. said.

“So we expect a three percent growth for exports this year. We’re already at half of the year and we’re still negative so for us to be able to beat the target, we have to grow 20 to 25 percent and there’s no way we can get that,” he added.

Ortiz-Luis, who also serves as the private sector vice-chairman of the Export Development Council, said the downgraded growth is also likely to be the government’s number should it revise its earlier target.

“That’s my personal number but I think that is the number they will use because I think the NEDA will probably come up with that number as well,” Ortiz-Luis said.

Ortiz-Luis said the so-called Brexit or UK’s decision to leave the European Union, and the Philippines recent win in its arbitration case against China over the South China Sea are both major factors for lower exports this year.

“The problem with exports now is the market, it’s not about our supply and policy. US is slowly improving, Japan is okay, but the problem is China joined the frame (with its economic issues) and recently, Brexit and our political problem with China,” he said.

The Department of Trade and Industry earlier expressed optimism for the country to achieve the agency’s exports growth target of between eight to nine percent this year.

Last year, combined exports of goods and services ended flat due to the slowdown of outbound merchandise shipments experienced throughout the year.

Under the Philippine Export Development Plan 2015-2017, merchandise exports are projected to grow between 5.4 percent to eight percent this year and between 6.7 percent to 10 percent next year.

Services exports, meanwhile, are estimated to increase between nine to 10.3 percent this year and between 9.9 percent to 12 percent in 2017.

Combined, total exports are seen to expand between 6.6 to 8.8 percent this year and between 7.7 to 10.6 percent next year.