The Department of Trade and Industry reduced its medium-term export projections from $130 billion set in the Philippine Export Development Plan (PEDP) 2018-2022 to $103.9 billion.
“Given that the COVID-19 disrupted several business models, it will be difficult to go achieve our pre-pandemic targets. Hence, we had to adjust our projections based also on the various inputs from industry stakeholders,” said DTI Secretary Ramon Lopez.
Travel goods, garments and wood-based industries were hit the most because of weak global demand and a decrease in production due to COVID-19 restrictions, he said
Lopez said the new goal was a fighting target for the DTI “given the challenges of the pandemic and the emergence of new strains, and given that this is higher than the US$86 billion set by the Development Budget Coordination Committee (DBCC).”
He said the DTI was optimistic new investments and the build-up of export capacities were highly possible with support coming from the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and the extension of the Bayanihan 2, We Recover As One Act.
Goods and services exports in 2020, based on industry forecasts, would shrink 14.7 percent to $80.5 billion. They are expected to rise 12.4 percent to $90.5 billion in 2021 and 14.8 percent to $103.9 billion in 2022. Lopez asked the DTI’s Export Marketing Bureau to review the targets given the drastic change in the global business environment.
For electronic products, the DTI noted that the Semiconductor and Electronics Industry of the Philippines already announced a 7-percent decline in exports for 2020, while the industry is projected to rebound by 7 percent in 2021.
Meanwhile, based on market intelligence forecasts, the services sector is expected to grow 17.1 percent in 2020, 11 percent in 2021 and 14.8 percent in 2022. The Information Technology and Business Process Association of the Philippines’ assumption of a 0.5-percent slowdown in 2020 and 3.5 percent growth in 2021 were also taken into account.
Service exports will be lifted by ITBPAP’s growth forecast, as well as continued growth on health information management, content development, the creatives industry and the expected recovery in travel-related goods and services sectors due to the availability of vaccines in the next two years.
At least 4 industries are expected to post positive growth rates by the end of 2020. These are vehicle auto parts by 15.4 percent, other minerals”•mostly copper and nickel ore”•by 29.9 percent, other fruits and vegetables by 8.6 percent, and basketwork by 28.3 percent.
Lopez said the DTI would focus on expanding industries with greater opportunities, such as those in high-value electronics, automotive and e-vehicles parts, processed food, minerals, other minerals, IT-BPM and creatives. The EMB will meet with stakeholders to refine sectoral targets and strategies.
“A whole-of-nation approach and a stronger support to the private manufacturing and services industries and academe collaboration are needed to work on achieving the fighting targets set,” said Lopez.