The United States remained the top destination of Philippine products where $447.27 million worth of goods were shipped. Suffering a severe recession, US buyers ordered 35.3 percent less than what they purchased from the Philippines in April of 2008.

Second biggest market, Japan also bought less at $433.86 million which was 34.7 percent less than the $664.39 million it reportedly bought from the country in April 2008. Japan is also in recession. Sales to China, the third biggest market, also went down by 41.1 percent, on revenues of $306.86 million. -- Abe P. Belena, PHILEXPORT News and Features <--back

2. Carefully watch OFW remittances, foreign chambers warn economic managers

The government’s economic managers have been advised to keep a tight watch on trends in overseas Filipino workers’ (OFW) remittances because a decline of 10 percent this year means lost dollar inflows of $1.6 billion which is equal to total foreign investments last year.

“Remittances from nearly 10 million Filipinos abroad that increased 14 percent last year to a record high of $16.4 billion now make one tenth of the gross domestic product (GDP),” the Joint Chamber of Foreign Chambers of Commerce pointed out in its recently released assessment of the impact of the deepening global economic crisis on the Philippine economy.

It further said that together with the business process outsourcing industry, remittances have kept the domestic economy from slipping into recession.

It recalled that when the global economy went on a slump during the Asian financial crisis of 1998, remittances dropped by 11 percent. During the global trade slowdown of 2001, remittances also slipped by 0.3 percent.

The BSP had forecasted flat growth this year but non-government analysts see a decline of up to 7 percent, the joint chamber said. If the March figure holds for the rest of the year, the month when overseas Filipinos sent in an all-time high of $1.5 billion, there would not be much to worry about.

And yet, expected to go down for the rest of the year will be the remittances from the United States which account to about half of all the dollars sent by OFWs to the Philippines every month. About one fourth of all Filipinos abroad or roughly 2.5 million in the United States, send half of total remittances.

The decline in OFW remittances in the US should be made up by those deployed in the Middle East, particularly Saudi Arabia and Quatar that continue to hire Filipinos, although construction activities in Dubai have practically grounded to a halt, the foreign chambers noted. -- Abe P. Belena, PHILEXPORT News and Features <--back

3. Exporters hope rebound by year-end; whole year forecast is 8% below zero

Exporters are hopeful the market will post positive growth towards the end of 2009 as the industry is expected to recover from the impact of the global financial crisis, but average growth for the year will remain at the negative territory at around -8 percent.

This optimism was expressed by Philippine Exporters Confederation Inc. president Sergio Ortiz-Luis in an interview amid the -3.6percent drop in export revenues in April 2009 reaching $2.8 billion from previous month’s $2.9 billion.

Ortiz-Luis said the Export Development Council (EDC) forecasts total exports to contract -8 percent this year, with merchandise exports projected to reach -16 percent.

The decline in this year’s overall growth projection from earlier -2 percent has been attributed mainly to lower revenues of crisis-hit electronics sector, which accounts for around 60 percent of total exports.

However, despite the 3.9-percent improvement in sales of electronic products in April this year over the previous month, government data indicated that total exports during the month were lower compared to March figure as other major export products --garments and machinery and transport equipment posted considerable declines.

All major exports suffered double-digit retreat except tuna.

But Ortiz-Luis said the services sector will bring up total export sales this year, with its revenues seen to grow by 27 percent.

“At the moment, the growth drivers are agriculture and services, particularly BPO (business process outsourcing),” he said.

Food exports remain robust this year especially marine products, he added, noting that “tuna is contributing very much.”

“The -8 percent is how we think we will perform (this year). It may improve but it can go either way,” he said.

Ortiz-Luis is also confident that 2010 might be a positive year for the export sector as positive growth is expected by year end.

The EDC’s -8 percent exports growth projection for this year is higher than the -15 to -13 percent set by the Development Budget Coordination Committee taking into account the external economic environment.

An economist earlier projected that global economic recovery may occur around April to July 2009 or maybe a bit longer. -- Danielle Venz, PHILEXPORT News and Features <--back

4. Food exporters ask gov’t to develop food pre-inspection facilities nationwide

Food exporters and processors have asked the government to develop pre-inspection facilities nationwide, estimated to cost from $2 million to $3 million.

These are crucial to attune the country’s food testing and certifying capabilities to that of the United States. The testing of food products at their points of origin is a requirement of US Senate Bill 510 which will become effective January 2, 2010 once signed into law next month by President Barack Obama.

Roberto C. Amores, president of the Philippine Food Exporters and Processors Organization (Philfoodex), said needed pre-inspection facilities include microbiology laboratory equipment, which have to be established in different areas of production, and all other bio-terrorism-related requirement.

Amores said these have to be supervised by the laboratory facility inspection system of the accrediting destination which is the US.

“With the upgrading of the pre-inspection system, we would be ready when that time comes when there is a need for this (pre-shipment) certification at the points of origin,” he said.

Amores said food exporters are in discussions with a consultancy group from the US who can arrange a pre-entry clearance from the point of origin to avoid tedious inspection process and product detention at final destination.

He noted that industry players have to gear themselves for the requirements of the new US legislation.

“We cannot protest on a particular law being passed by the US, but we can ask for extension of its effectivity because of the preparations needed at the point of origin,” he stressed.

Amores, who is also the Food Trustee of the Philippine Exporters Confederation, Inc., expressed concern that such legislation could affect the country’s food exports to the US.

“As a result of Senate Bill 510, compliance capability would be limited. If the compliance capability of food exporters are limited by SB 510 for shipments going to the US, of course exports would be negatively affected,” he said.

Amores considered the new US legislation as a non-tariff barrier to trade beyond the World Trade Organization.

“Certification system is a non-tariff measure. Under the PCCI (Philippine Chamber of Commerce and Industry) or other advocacy groups and organizations, we will try to see what can be done to avoid its negative impact on the food exporters,” he said. -- Danielle Venz, PHILEXPORT News and Features <--back

5. UK keen to increase trade with RP

British businesses are keen to increase trade with the Philippines in the next few years particularly in financial and outsourcing services.

At the sidelines of the launch of the Philippine Learning Centre for Trade and Investment Policy (PLACE), UK Ambassador to the Philippines Peter Beckingham said they also intend to import goods from the country such as clothing, baked food products, coconut oil and coconut products.

Beckingham said his country is a big exporter here of transport equipment especially for the car sector, some retail goods and pharmaceutical products. Bilateral trade between the two countries is worth around $2 billion annually, with the balance in the Philippines’ favor.

Apart from increasing trade with the country, Beckingham said British firms also plan to invest in the business process outsourcing (BPO), energy and mining sectors.

He said these involve new investments and expansion plans.

“We hope that all of those sectors can be developed in the next few years,” he noted. “British companies find this is a good country to work in.”

The UK, one of the largest foreign investors in the Philippines, has already made major investments in the country, with concentration in power, energy, agri-business, transport, water and financial services.

But despite these, the Ambassador reiterated his hope that the Philippines liberalizes more sectors to foreign ownership.

“That’s (land ownership) an economic provision of the (Philippine) constitution which we hope after the elections would be changed or removed,” he said. “There are also areas in governance where we would like to see more playing fields, like in some areas of taxation for example.”

Meanwhile, the PLACE, the first and premiere private sector-led trade policy and training center in South East Asia , is designed to train and equip private stakeholders with knowledge and information on trade policy and negotiations.

“Through the modules that we will be supplying, we hope to be able to impart new notion that liberalization will be beneficial to the large part of the population, provided that stakeholders are supplied with adequate and objective knowledge and information for them to better understand the intricacies and solutions for the changing and challenging trade landscape,” said Donald Dee, chairman of the Universal Access to Competitiveness and Trade (UACT).

Among the courses PLACE offers are rules of origin, sanitary and phyto-sanitary measures and technical barriers to trade, trade remedies, trade in services and dispute settlement mechanism. -- Danielle Venz, PHILEXPORT News and Features <--back