By Jenina P. Ibañez

THE TRADE DEPARTMENT’S Export Marketing Bureau (EMB) has adopted a 2-4% growth forecast for overseas sales next year of the country’s goods and services, choosing to be conservative as global uncertainties persist.

“The forecast that we have for exports is still positive, although it’s just a single-digit range of total for goods and services, probably from two to four percent,” EMB Director Senen M. Perlada said in a telephone interview on Friday.

At the same time, he said the bureau is retaining the 2022 target detailed in the country’s export plan.

The Development Budget Coordination Committee on Dec. 11 adopted 2020 growth projections of four percent for merchandise exports and nine percent for overseas service sales.

The Philippine Export Development Plan 2018-2022 approved by President Rodrigo R. Duterte in July targets a compound annual growth rate of 8.89-9.96% for goods and service export revenues to $122-130.8 billion in total by 2022.

“The challenge to us now… what we need to do is to still meet the target in spite of the weighed-down forecast,” Mr. Perlada said.

He said that the bureau is “cautiously optimistic” about the first phase of the trade deal between the United States and China, which cuts US tariffs on China after an almost 18-month dispute between the two countries. “It’s good news in the sense that the first phase of the US-China trade (deal) naayos na (has been fixed),” he said, noting that he expects improved Philippine trade as a result.

This cautious optimism, however, will not boost 2020 expectations.

“May headwinds pa rin (There are still headwinds). We don’t know still what’s going to happen to (US President) Trump…may impact pa rin ’yan (that still has an impact). Brexit is still something that we don’t know. It dampens the (trade) sentiment — the uncertainties.”

“It’s the general sentiment for trade. People just want to play safe. They’re not going to be all out. The only thing I can say is medyo neutral to positive ’yung trade natin. (our trade is a bit neutral to positive),” he added.

US President Trump is currently going through impeachment proceedings and will face re-election next year. UK Prime Minister Boris Johnson promised Britain’s exit from the European Union by the end of January 2020.

To boost Philippine export growth next year, the Trade department is looking at non-traditional trade partners, as well as promoting finished products instead of intermediate goods.

“The strategy is, we want to be protected from the effects of the global trade war by engaging more with high population density countries,” he said, noting that products directly sold to economies with bigger populations and high purchasing power will suffer less impact from global value chain shocks.

He said the department is studying possible exports to Kenya, South Africa, Egypt and Russia as part of diversification plans.

Although the Trade department will continue pushing priority sectors like electronics and business process outsourcing, in 2020 it will also promote aerospace manufacturing, including maintenance repair services as well as aircraft galley and toilet parts production.

Mr. Perlada said the department also targets partnerships with subcontractors of major aircraft manufacturers including Boeing and Airbus. “(Philippine aircraft exports) is growing in the double digits… I think we can expect that to continue because travel is still a growth area.”

The department will also be focusing on promoting the country’s creative industries, including wearables such as bags and footwear, original content for animation and game design, and integrated circuit designs in the electronics industry.

Mr. Perlada also cited potential for more farm exports and the possibility of free trade agreements (FTA) being forged next year. The Philippines is currently looking at the possible signing of the Regional Comprehensive Economic Partnership between Southeast Asian economies and major trade partners as well as a free trade agreement with South Korea. The Philippines may also begin FTA talks with the United States and the United Arab Emirates next year.

At the same time, the EMB is looking for more funding to participate in international trade events and support small businesses, as well as additional supply for agriculture products. “The difficulty sometimes is we promote but there’s no supply, but for next year we should be able to,” he said. “To move the needle in this sector, we simply need supply.”