SURABAYA, Indonesia – The Philippines’ export sector can break into the new markets of India and Mexico as both countries have recorded a notable increase in demand for imported products amid a global economic slowdown.
In Manila, National Economic Development Authority (NEDA) Secretary Emmanuel F. Esguerra said the country needs to tap India and Mexico to cushion the downtrend of export sales the country which stood at a negative 3% in December 2015.
“Expanding market opportunities in merging export markets such as India and Mexico can boost the country’s merchandise exports, as they have been increasing their demands for consumer products,” said Esguerra.
The economy — led by outgoing President Benigno S. Aquino — failed to surpass the $4.802 billion export sales it reaped in December 2014 as government statistics showed that receipts from foreign shipments only reached $4.66 billion the following year.
Part of the downtrend in exports could be attributed to the slow down in the country’s major trading partners, such as China, said Esguerra.
“Advanced and emerging economies continue to face difficulties. In particular, the slowdown in China due to on-going structural transformation, as well as the contractionary fiscal policies in oil-exporting countries as they adjust to declining oil revenues, pose risks to the Philippine economy this year,” the socioeconomic planner said in a statement on Wednesday, February 10.
Exports to China accounted for 9.1% of December’s figures, ranking fourth with shipments at $422.15 million, according to the Philippine Statistics Authority (PSA). The value, however, translates to a 22.7% decline compared to export sales of $546.25 million in 2014.
Even sales from Japan, the country’s top export market with $939.17 million worth of total receipts, also dropped by 7.7%.
Meanwhile, shipments to the United States of America (USA) grew by 3% or $687.33 million from $677.05 million year-on-year.
Shipments to European Union (EU) member countries grew by 35.5%, although total merchandise exports only amounted to $654.98 million.
“As soft global demand is expected to continue, the challenge to be able to expand export market destinations and diversify product offerings,” said Esguerra.
The economies of India and Mexico have experienced robust growth in a period where growth rates are down.
In 2015, India’s gross domestic product (GDP) was 7.5%, exceeding China’s 6.9%.
Meanwhile, in the same year, Mexico’s GDP rose by 2.5%, beating a pessimist government forecast of 2.2% instead of 3.2%.
Both countries have an emerging consumer class, apart from their significant population size.
Esguerra estimates that the country’s major trading partners such as the US, Japan, and EU “are expected to post a slight recovery this year.”
Stagnant exports was attributed to the Philippines’ sluggish 6.3% GDP growth in 2015 as the country was also importing more than it was exporting in the said period. (davaotoday.com)