US-China trade row takes toll on PH exports
The Department of Trade and Industry (DTI) has changed its tone about the US-China trade war, saying now that exports have been affected as global demand for certain products weakened.
Trade and Industry Secretary Ramon Lopez said that the country was affected by the trade war, which was a contrast to the government’s previous statements that said the country saw no impact from the growing tension between the two economic giants.
The DTI had previously said that the Philippines’ lack of impact from the trade war made it a good destination for companies wanting to avoid the expensive tariff war. It remains to be seen how the Philippines’ image as a possible refuge from the trade war will be affected now.
“The Philippines, as part of a global production network, is being affected by the negative sentiments brought by the US-China trade war, since US and China are the top trading partners,” he said in a statement on Thursday.
Citing industry players, he said global demand for electronic parts and final goods has been shrinking and would continue to weaken in 2019.
The country’s merchandise exports dropped 2.5 percent in March to $5.88 billion from the same month a year ago, according to the Philippine Statistics Authority (PSA). Electronic products, which accounted for more than 55 percent of goods exported that month, fell 3.7 percent to $3.23 billion.
The Philippines is not the lone country in the region suffering a decline, he said.
Out of 11 trade-oriented Asian economies, nine countries saw declines in their export performance, he said, citing the cases of South Korea, Indonesia, Singapore and Japan.
“In the case of the Philippines, this has been mirrored in the decline of exports in certain electronics sub-sectors such as components and devices, control and instrumentation, and telecommunication products to major markets like Singapore and Hong Kong,” he said.
PSA data showed that components and devices—which are grouped as semiconductors—saw a 3.1-percent decline to $2.32 billion in March year-on-year.
The sub-sector largely accounted for the country’s electronics exports.
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