$120-B exports by 2016 achievable
February 25, 2014
Exporters expect a steady 10 percent annual growth for the 2014-2016 period to hit the $120-billion level by end of 2016 with the services sector growing at a faster clip than the merchandize sector, but on the premise that government will implement some reform measures to boost exports.
Sergio Ortiz-Luis Jr., President of the Philippine Exporters Confederation Inc., said that together with the Export Development Council, PHILEXPORT intends to push some advocacies and programs which will form the core of the 2014-2016 Philippine Exports Development Plan (PEDP).
According to Ortiz-Luis, the export growth is aimed at 10 percent starting 2014 to 2016 for both merchandise and services sectors.
Of this, the share of services is expected to improve by 23 percent to $27.994 billion in 2016. The merchandise sector will still continue to account for the bulk with $92.179 billion in 2016, but at a slightly lower share of 77 percent share of total exports. This year, the goods sector is positioned to reach $75.594 billion for a share of 78% of the total.
This means the government would still stick to bits $120 billion exports level by 2016.
To achieve this three-year exports target, Ortiz-Luis has urged for the immediate approval of the Customs Modernization and Tariff Act; Competition Policy; amendment in the Charters of the Philippine Ports Authority and the Bangko Sentral; and the amendment in the IRR of the Magna Carta for Micro, Small and Medium Enterprises.
“Executive action and political will is required to lower the cost of shipping, power and some export fees, as well as address unclear policies and governance issues in certain government agencies,” said Ortiz-Luis.
Ortiz-Luis stressed that tax policies have to be more simple and business-friendly. Labor productivity also needs to improve by facilitating technology acquisition and capacity building he said.
Infrastructure, logistics and disaster and risk reduction and management programs have to be in place as part of efforts towards production and supply chain efficiency, he added.
In addition, exporters noted that the country’s export promotion funds as sorely inadequate compared with those of our neighbors in Asia. “This is crucial, since expansion of existing markets and opening new ones are in our strategies to meet the 2016 export target,” Ortiz-Luis said.
Likewise, government is urged to invest more to revive the manufacturing sector and the related technical infrastructure which is expected to answer the gap between the country’s sterling economic performance and creeping unemployment rate, the highest in the region. “Unfortunately, this is what happens in a services-led economy, where growth heavily favors the more educated and makes opportunities for the unskilled scarce,” he said.
Ortiz-Luis, however, said that exporters are still positive they can hit the growth target on the country’s strong macro economic fundamentals.
“But we need to go beyond the current survival mode if the industry is to continue contributing at least 35% to the country’s GDP,” he said.
“The additional $50 billion and more in the next two years will get a big push from the successful implementation of our proposed policies. Then, we would have contributed significantly to achieving inclusive and sustainable economic growth as jobs are generated and lives of the poorest of our poor get better,” he said.