The Philippines’ export performance is lagging behind the global recovery led by East Asia. — REUTERS
By Jenina P. Ibanez, Reporter
PHILIPPINE EXPORT performance continues to lag behind a global rebound led by East Asia, a United Nations (UN) report said.
The UN Conference on Trade and Development (UNCTAD) global trade update released on Tuesday said global trade in goods have surpassed pre-pandemic levels, although services trade continues to lag.
“Global trade is expected to further rebound in Q2. For 2021, global trade is projected to grow by 16 percent, but the outlook remains uncertain,” the report said.
Much of trade resilience last year was due to East Asian pandemic mitigation, UNCTAD said.
“The positive trends from the last few months of 2020 grew stronger in early 2021. In Q1 2021, the value of global trade in goods and services grew by about 4 percent quarter-over-quarter and by about 10 percent year-over-year,” UNCTAD said.
The UNCTAD report showed the Philippines scored 0.51 in export performance in the fourth quarter last year, based on an index in which a higher score indicates above average performance.
China scored 0.71, while Vietnam was at 0.59 and Korea at 0.52. However, Singapore was lower at 0.46 and Thailand at 0.43.
Philippine export volatility was 0.11, while Chinese and Korean exports were less vulnerable at 0.09 and 0.07, respectively. Singapore’s export volatility was at 0.01, and Thailand’s was at 0.04.
Philippine goods exports in March jumped 31.6% to $6.68 billion compared with the same month last year, data from the Philippine Statistics Authority showed. Export growth that month was the fastest in over a decade, or since the 46.8% growth in September 2010.
This hints at some improvement after goods exports fell 10.1% to $63.8 billion in 2020.
Philippine Exporters Confederation, Inc. (Philexport) is optimistic about Philippine export recovery this year, noting a potential increase in garment exports after labor strikes in Myanmar slowed production.
“Mining has been allowed to resume so (that) has upside too. Electronic(s) could do better if not due to shortages of parts,” Philexport Chairman George T. Barcelon said, referring to the lifting of a nine-year ban on new mining deals and a global semiconductor shortage that could last until next year.
UNCTAD noted trade rebound is stronger in developing countries compared with developed countries, but such recovery is muted when East Asian economies are not in the picture.
A positive 2021 global outlook, UNCTAD said, would depend on the further easing of pandemic restrictions but fiscal stimulus could also aid recovery.
“The fiscal stimulus packages, particularly in developed countries, are expected to strongly support the global trade recovery throughout 2021. The value of global trade should also rise due to positive trends across commodity prices,” UNCTAD said.
Some vulnerabilities include uneven economic recovery among different countries, with more pandemic-related disruptions expected in developing countries throughout the year.
Government interventions amid tensions among large economies could also restrict trade, UNCTAD said. Consumer behavior could also have changed due to the pandemic, with healthcare and communications demand increasing while travel goods demand slips.
“Some of these changes may be enduring, if so, they will be influencing the demand for foreign goods and services,” the report said.