DTI has no short-term solution for trade problem

"I feel that I have been confirmed in my position that the DTI has no solution for this countryís worsening trade."

On Sept. 20, 2018 I wrote a column on the state and direction of the Philippines’ merchandise trade, more specifically the yawning imbalance in this country’s trade with the world. The point of that column was indicated by its title: “DTI Has No Solution for Worsening Trade.”

Last week the head of the Department of Trade and Industry (DTI) responded to the column through a letter to the Editor of this paper. Most of Secretary Ramon Lopez’s lengthy letter consisted of general, motherhood-type statements; only in some passages did he attempt to address the issue that I raised. Those passages are quoted hereunder in the sequence in which they appear in his letter.

“We have already seen the beginning of structural change in the form of stronger growth for the manufacturing sector over the last two years, at nearly 8 percent as opposed to 5 percent average growth over the 2000-2015 period.”

“(DTI’s) new industrial policy known as Inclusive Innovation Industrial Strategy (i3S) … has five major pillars covering the creation of new industry clusters—human resource development and capacity building, MSME development, innovation, entrepreneurship and ease of doing business. The priority industries are auto parts, electronic and electrical (components), aerospace and MRO, agribusiness, chemicals, shipbuilding and ship repair, tool and die manufacturing, iron and steel, IT-BPM, furniture, garments/textiles/creative materials, construction, transport and logistics.”

“Our industry development strategy aims to address the roadblocks to our industry value chain that will strengthen our export manufacturing base over time. It is important to build on the manufacturing capacities; thus the need to pursue relentlessly investments in manufacturing.”

“We hope to see certain export growth tracks sustained as large export groups like electronics (register) upticks in the second half of 2018, albeit on a modest single-digit trajectory. In recent years we have also seen the growth of non-electronic exports in the total increasing to 47 percent in 2017 from 38 percent in 2007.”

“(The) DTI, through the Export Development Council (EDC), has finalized the Philippine Export Development Plan (PEDP), 2018-2022, which consolidated the strategies in 2015-2017 into more effective groups of strategies, namely, (1) Improve the overall climate for export development, (2) Exploit existing and prospective opportunities (presented by) trading arrangements and (3) Design comprehensive packages of support for selected product and service sectors.”

In my Sept. 20 column I stated that with this year’s merchandise trade deficit growing at an alarmingly rapid rate—it was $36 billion for the first eight months—trade authorities must have a plan for bringing forth exports sufficient to close, or at least substantially narrow, the merchandise trade gap. Not an export development plan, not an inclusive innovation industrial strategy, but industries ready, with DTI encouragement and support, to start selling, or increase their sales, to foreign markets.

Perhaps the above-quoted statements of the Secretary of Trade and Industry will lead this column’s readers to think that, contrary to the title of my Sept. 20 column, DTI has a solution for this country’s worsening trade. But they have not had that effect on me. On the contrary, I feel that I have been confirmed in my position that the DTI has no solution for this country’s worsening trade.

Topics: Department of Trade and Industry , Ramon Lopez , Export Development Council , Philippine Export Development Plan
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