The Finance Department said Tuesday it expects exports to recover this year on improved trade with China and Russia, following a dismal 5-percent year-on-year drop in the first 11 months of 2016.
Finance Undersecretary Gil Beltran, however, said the export sector should increase its competitiveness amid the intensifying competition.
Beltran said in an economic bulletin the government should implement the necessary agenda and programs vital to improving the export sector.
Data from the Philippine Statistics Authority showed merchandise exports fell 7.5 percent to $4.732 billion in November 2016 from $5.118 billion in the same month in 2015.
Total merchandise exports also dropped 5.2 percent in the first 11 months of 2016 to $51.361 billion from $54.168 billion in 2015. Merchandise imports climbed 13.7 percent in the 11-month period to $73.7 billion from $64.8 billion.
This resulted in a record $22.4-billion trade deficit in the first 11 months of 2016, wider than $10.7 billion a year ago.
Beltran said that amid slowing exports, the government should pursue infrastructure development, free trade and bilateral trade agreements and the empowerment of micro, small and medium enterprises.
“We should continue infrastructure development especially in port areas to enhance cross-border trading; pursuit of free trade and bilateral trade agreements with other economies and regions; and capacitating MSMEs to tap export markets,” Beltran said.
Data from the Finance Department showed around 60 percent of the country’s exporters were MSMEs. Beltran said an enhanced access to credit would further improve the export capability of these small entrepreneurs.
Finance Secretary Carlos Dominguez III earlier said President Rodrigo Duterte wanted to explore or expand opportunities with countries other than traditional trading partners in line with government plans to further open up the economy to foreign investors.
Data showed only $46 million worth of Philippine goods were shipped to Russia every year, while China ranked as the fourth largest buyer of the country’s exports at $5.58 billion as of November 2016.
China and Russia are being eyed by the government as major destinations for Philippine agricultural produce and manufactured crafts, following President Duterte’s rebalanced foreign policy directions.