PHILIPPINE EXPORT performance remains below East Asian economies that are leading global trade recovery, a United Nations (UN) report said.
According to the UN Conference on Trade and Development (UNCTAD) global trade update released on Tuesday, East Asian economies have been leading global trade’s recovery from the effects of the coronavirus disease 2019 (COVID-19).
Economies like China, Taiwan, Vietnam, and Korea posted global market share gains in exports.
“East Asian economies have been leading the recovery process with strong export growth and gains in global market share,” UNCTAD said, noting most manufacturing sectors rebounded in the fourth quarter, apart from energy and transport.
The UNCTAD report showed the Philippines scored 0.41 in export performance for the 11-month period in an index in which a higher score indicates above average performance. In contrast, China scored 0.56, South Korea at 0.43, Vietnam at 0.63, and Thailand at 0.42.
The Philippine export volatility is 0.44, showing higher vulnerability than China (0.39), South Korea (0.06), Vietnam (0.39), and Thailand (0.13).
UNCTAD said the pandemic impacted not just global demand but the relative competitiveness of countries.
“The competitiveness of countries has changed across sectors, with some economies gaining market share in some sectors while losing competitiveness in others,” it said.
China was able to capture more markets, gaining competitiveness in chemicals, metals, textiles, transport equipment, pharmaceuticals, and precision instruments.
In contrast, the Philippines lost competitiveness in machineries, one of its top export sectors, which declined 7% in the first 11 months of 2020.
Philippine goods exports last year declined 10.1% to $63.77 billion.
Government export targets for this year and 2022 were revised to reflect the extent of the impact of the pandemic, aiming for $105 billion.
Q1 SLOWDOWN SEEN
Meanwhile, the recovery in global trade is expected to slow down in the first quarter as uncertainty over the pandemic remains.
“The projections for Q1 2021 indicate a slowdown in the recovery of trade in goods (a 1.5% drop relative to Q4 2020) and a further decline for trade in services (a 7% drop relative to Q4 2020), largely because of continued disruptions in the travel sector,” UNCTAD said.
“However, projections remain imprecise due to persisting concerns about COVID-19 and uncertainty about the magnitude and timing of stimulus packages in some major economies.”
In 2020, global trade saw a 9% drop in value, with trade in goods slipping 6% and trade in services falling 16.5%.
“The effect of COVID-19 on global trade was most severe during the first half of 2020 with a drop in value of about 15%. Global trade began to recover in Q3 2020 and more strongly in Q4 2020,” UNCTAD added. — J.P. Ibañez