A group of exporters reduced its medium-term target on slower global demand, fluctuation of the peso against other currencies and negative trade performance over the past 17 months.
The Philippine Exporters Confederation Inc. said the annual export target of $100 billion would now likely be achieved by 2020, instead of 2017. It made the announcement following the two-day 2016 National Exporters Congress held in Manila on Dec. 7 and 8.
“Although, the weakened peso has not so much to do with the forecast, it should be pushing exports to buffer the spate of negative performances in the last 17 months. But our peso is moving in parity with the other currencies that also suffered similar fate compared to the US dollar,” said PhilExport president Sergio Ortiz-Luis.
The revised Philippine Export Development Plan projected that exports would increase by 0 to 3 percent this year, after contracting 0.66 percent in 2015.
PhilExport said if exports managed to grow 3 percent to 5 percent in 2017, the $100-billion target could still be achieved by 2018.
“It is a fighting target. But we certainly hope that the target will be achieved earlier than 2020. Before the target was $120 billion but that was downgraded to $100 billion for some legitimate reason,” Ortiz-Luis said.
Data showed the growth of the export industry strongly relied on the growth of services which grew 10.57 percent in 2015. Merchandise exports posted anemic growth over the past couple of years.
Data from the Philippine Statistics Authority showed merchandise exports tumbled 6.2 percent in the first nine months to $41.7 billion from $44.5 billion a year ago.
The export development plan expects services exports to grow 9 percent in 2016 and 8 percent in 2017. Services exports include tourism and business process outsourcing.
“However, the services sector may soon reach its peak. It will start to plateau in the next few years because of its very high base of its main contributor, the IT-BPM sector,” said Bureau of Export Trade Promotions Senen Perlada.
Export growth has been services-driven in the past eight to nine years, due to the phenomenal growth of the information technology-business process management sector. IT- BPM comprised about 80 to 85 percent of the services exports.
Meanwhile, merchandise exports contracted 5.27 percent in 2015 and are projected to post zero growth in 2016 and about 3 percent growth in 2017, based on the revised PEDP.
Employment is also expected to increase by a225,000 heads in 2016 and 600,000 by 2017.