7%-8% export growth target in 2014 becomes more attainable – DTI
The country’s exports are expected to grow 7-8 percent this year compared to the projected exports level of $76 billion in 2013 with the help of an exchange rate that favors exporters.
Seven Perlada, Executive Director of the Bureau of Export Trade Promotion, told reporters on the sidelines of the AEC 2015 Forum on the Asean Comprehensive Investment Agreement: Opportunities and Challenges for Philippine Businesses that growth drivers are the growth sectors in electronics such as the automotive and consumer electronics products like electronic gadgets.
According to Perlada, the impact of the peso-dollar exchange rate is working in favor of the exports sector. The peso has depreciated to about P45 to a US dollar from P42 to P43 last year.
A weak peso will benefit the indigenous sector because it does not have much import component, but it will not be of help to the electronics sector which is highly import dependent for its inputs, Perlada explained.
“Considering that more than 60 percent of our exports are non-electronics and only 40 percent electronics, the peso will be of help for the country’s exports now,” he said.
The lag time on the forex rate is 6 months and exporters are just signing up contracts now. This means that higher exports yield have been assured within this year.
This positive economic environment also augurs well for the $120 billion exports target by 2016.
“The $120-billion exports target in 2016 is a stretched target but it has become more attainable,” Perlada said. The new Philippine Export Development Plan 2014-2016 is expected to be approved by the Export Development Council in March this year.
In addition, Perlada cited the growing contribution from the services sector to the country’s overall exports noting this sector is expected to account for $21.5 billion of the projected $76 billion overall exports in 2013. In terms of market, the DTI is also looking at new markets Brazil and South Africa.
According to Perlada, Brazil could be a market for the country’s swimwear apparel and food products while South Africa is for personal care and cosmetics products. South Africa is also eyed as a gateway into the African continent, which is offers big potential since it is a landlocked developing market.