MANILA, Philippines—The Philippines was a bright spot in Asia-Pacific last year amid a slowing down in the region’s emerging economies, according to the Asia-Pacific Economic Cooperation (APEC).
This year, APEC member-economies are poised to recover, but only if businesses innovate to be more productive, the group said.
The latest APEC Economic Trends Analysis report published this month noted that the economic performance of its members in 2013 was pulled down mainly by slower trade with the European Union (EU), which had reeled from an economic downturn.
“APEC GDP [gross domestic product] is estimated to have expanded by 3.7 percent in 2013, down from the 4.2-percent growth seen in the previous year. This is in contrast to the trend seen in the rest of the world where GDP growth moved to 2.0 percent in 2013, from 1.6 percent growth in 2012. One of the factors attributed to this more subdued APEC economic performance was the uneven recovery of APEC exports,” the report read.
While APEC economies had enjoyed a surplus or more exports than imports from the EU in previous years, trade was reversed in the last two years, with Asia-Pacific posting a wider trade deficit with Europe worth about $52 billion—almost 10 times bigger than in 2012—during the first 11 months of last year.
Exports to non-EU markets also dipped 0.5 percent as of end-November last year, APEC data showed.
Trade among APEC members, meanwhile, rose 2.5 percent during the first 11 months of last year, albeit slower than the 4.7-percent increase in 2012.
The region’s sluggish export performance was more pronounced in the emerging and developing member-economies, APEC said.
“[A]ctivity in other emerging and developing APEC economies grew at a reduced speed in the second half of 2013, after a strong start in the first quarter of 2013. As a group, GDP growth for developing and emerging APEC, excluding China, decelerated from a 5.3-percent year-on-year growth in the last quarter of 2012 to 2.8 percent year on year in last year’s final quarter,” the report noted.
The Philippine economy, however, managed to jump despite the global economic slowdown and a slew of natural disasters that struck the country last year, APEC said.
“APEC economies in Latin America have seen a rapid slowing in growth… The same trend was observed in some APEC emerging and developing economies in Southeast Asia, with the Philippines being the notable exception,” the report read.
“The Philippines’ economy continued to perform strongly in 2012 with GDP growing by 6.8 percent. The economy expanded by 7.2 percent in 2013, notwithstanding the adverse effects from Typhoon “Haiyan” in November that partly reined in the expansion of capital formation and consumer spending,” it added.
This year, economies across the Asia-Pacific region are expected to rebound, mainly hinged on “an expected firmer economic recovery” of large industrialized countries such as Japan and the United States, APEC said.
“Economies in the APEC region are recovering and we expect this to accelerate. Our priority now is to ensure that the region moves to a higher medium-term growth path. To achieve that, APEC economies are laying the groundwork for a rebound in trade and productivity,” APEC Secretariat executive director Alan Bollard said in a statement Thursday.
Economic growth across the 21 APEC member-countries this year is seen to match the 4.2-percent expansion posted in 2012, while a slightly higher growth of 4.4 percent is projected for next year.
Bollard, however, pointed out that challenges—including concerns on the macroeconomic imbalances linked to the global financial crisis and post-crisis uncertainty—still remain and must be addressed.
“APEC trade is at high levels in global terms but exports remain sluggish and are not contributing to growth in an optimal way. At the same time, the region is facing the twin challenges of decelerating labor productivity and employment growth,” Bollard said.
“Production efficiency has dropped among firms in emerging and developing economies while companies in industrialized economies have increasingly turned to layoffs. Economic turnaround is a prerequisite for a revival in productivity and employment but that in and of itself may not be sufficient,” noted Quynh Le, lead author of the APEC Economic Trends Analysis report.