Exports to grow over 10% in 2014 on weak peso, rebound of electronics
Trade and Industry Secretary Gregory L. Domingo said exports could grow over 10 percent this year aided by the recovering electronics exports market and weak peso, which makes the country’s exports cheaper and competitive despite an initial setback on the country’s GDP.
“Exports will grow more than 10 percent this year because electronics is coming back on strengthening of the global economy and the depreciating peso will make our product cheaper,” Domingo told reporters.
The DTI chief made this projection ahead of the conclusion of the new Philippine Exports Development Plan (PEDP), which is being updated for the period 2014-2016. The PEDP is expected to be revised downward as the $120-billion target by 2016 is deemed difficult to achieve considering a low base figure.
Domingo even noted the initial reports from the recently concluded Manila Fame which showed strong sales and very satisfied exhibitors.
According to Domingo, the impact of the slight weakening of the peso against the US dollar will have an adverse impact on the GDP figure this year but on the medium term it will strengthen the GDP.
“This is because the weak peso is going to make our products in the exports market more competitive,” he said. The negative GDP impact, he said, would be a temporary dip.
“The GDP will recover as the country’s exports become more competitive because of more exports,” he added.
In fact, Domingo maintained that GDP is going to settle at 6.5 percent but it will be over 6.5 percent in 2015 assuming the foreign rate exchange stays at the same level. The peso is hovering between P44 to P45 against the greenback.
Domingo even downplayed the impact of the slower inflow of new investments in the first quarter this year.
He said the decline in the first quarter investments was largely due to the huge energy projects registered in the same period last year.
“Later in the year we will get a very big project,” he stressed.
He said most of the industry roadmaps have been completed except for a few like the automotive blueprint. These industry development roadmaps are expected to encourage new investments.
A resolution in mining is also close at hand with the Minerals Industry Coordinating Council set to propose a new mining law in Congress. He said the MICC is still willing to listen to the Joint Foreign Chambers, but added they have more or less made up their decision.
He said there are new interests from the international community to do business in the country as he cited the recent top level delegation from France.
The government is also undertaking aggressive investment campaigns abroad with President Aquino scheduled for a state visit to France and possibly UK and Germany in September this year.
“More investors are coming following last year’s missions, these are follow through missions,” he said.
“We need to raise our profile in Europe because there is a growing interests in the Philippines and that has to be reinforced because at some point we would like to pursue a free trade agreement with them,” he added.