DESPITE forecasts that global trade will face headwinds next year, the Philippines is seen to remain a bright spot in Asia as domestic drivers are expected to sustain its continued economic expansion, the Philippine Exporters Confederation Inc. said.
Sergio R. Ortiz-Luis Jr., who heads the country’s umbrella organization of exporters, said the group remained optimistic of the local economy’s resilience against external shocks as the country has a number of advantages in its arsenal, including being relatively insulated from global upheavals compared to other more open economies in the region.
The country, he added, also has “strong fundamentals” and derives “a larger percentage of growth” from domestic consumption.
Ensuring a sustained growth, however, will need the government and private sector working together to boost the micro, small and medium enterprises (MSMEs), which are expected to become new drivers of global economic growth.
Ortiz Luis stressed the need to increase their competitiveness by providing them the crucial access to financing.
He pointed out the need “to widen financing options for MSMEs, specifically by government allocating P20 billion in loans for MSMEs to directly tap without going through the usual collateral requirements, interest rate issues, strict repayment period and long documentation processes, among others.”
Ortiz Luis also called for a “pro-MSME agenda” that will mainstream MSMEs into the global supply chain and address the barriers they face in international trade.
MSMEs account for more than 99 percent of the registered enterprises in the Philippines and comprise 61.2 percent of the country’s total employment.
These efforts should be complemented by domestic reforms and measures “to help smoothen the way to sustainable, competitive exports amidst challenges,” he added. These included developing the necessary infrastructure, transportation and communications facilities to unclog roads and other bottlenecks, addressing loopholes in the supply chain and promoting innovation and productivity.
On the other hand, Philippine exports have remained sluggish, with the latest data showing a 10.8 percent decline in export receipts in October. This was the seventh straight month of decline owing to continued depressed global demand.
Philippine exporters are reportedly facing imminent threats from new global trends, including the return of some manufacturing operations to developed economies, the country’s non-inclusion in certain free trade deals among groups of economies such as the Trans-Pacific Partnership agreement, and continuing political uncertainties in the Middle East and Europe.