DTI ADJUSTS EXPORT TARGET TO $103 BILLION
The Department of Trade and Industry (DTI) adjusted its medium-term export projections from the original build-up to USD 130B target by 2022 set in the Philippine Export Development Plan (PEDP) 2018-2022 to USD 103.9B.
Given that the COVID-19 disrupted several business models, it will be difficult to go achieve our pre-pandemic targets. Hence, we had to adjust our projections based also on the various inputs from industry stakeholders,” said DTI Secretary Ramon Lopez.
He shared that the travel goods, garments, and wood-based industries were hit the most because of weak global demand and a decrease in production due to COVID-19 restrictions.
According to Sec Lopez, “The new projection can also be viewed as a fighting target for DTI, given the challenges of the pandemic and the emergence of new strains, and given that this is higher than the USD 86B set by the Development Budget Coordination Committee (DBCC).“
The secretary is also optimistic that new investments and build-up of export capacities will be realized due to the expected immediate passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and the extension of the Bayanihan 2 We Recover As One Act, which will impact the export recovery in the next few years.
According to the DTI forecasts, goods and services exports for 2020 will shrink by 14.7% to USD 80.5B. It will then grow by 12.4% to USD 90.5B in 2021, and by 14.8% to USD 103.9B in 2022. Lopez asked the DTI-Export Marketing Bureau (DTI-EMB) to review the targets given the drastic change in the global business environment.
Electronic products consistently compose more than half of Philippine exports. Their association, SEIPI, assumes a -7% growth for 2020 and a +7% growth by 2021. A majority of these electronics exports are semiconductors. SEIPI’s revised targets which will impact to total goods growth rate.
Meanwhile, Philippine services exports were based on market intelligence forecasts of 17.1% in 2020, 11.0% in 2021, and 14.8% in 2022. The Information Technology and Business Process Association of the Philippines’ (IBPAP) assumptions of -0.5% growth for 2020 and 3.5% in 2021 were also taken into account.
Service exports will be lifted by ITBPAP’s growth forecast, as well as continued growth in health information management, content development, the creatives industry, and the expected recovery in travel-related goods and services sectors due to vaccine being made available in the next two years.
For 2020, DTI found that four industries will have positive growth rates by the end of the year. These are vehicle auto parts (15.4%), other minerals—mostly copper and nickel ore (29.9%), other fruits and vegetables (8.6%), and basketwork (28.3%).
Secretary Lopez said that the DTI will focus on growing winning industries with greater opportunities such as those in high-value electronics, automotive and e-vehicles parts, processed food, minerals, other minerals, IT-BPM, creatives. DTI-EMB will also meet with stakeholders to refine sectoral targets and strategies.
“A whole-of-nation approach and a stronger support to the private manufacturing and services industries and academe collaboration are needed to work on achieving the fighting targets set,” said Sec. Lopez.
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