MANILA, Philippines – The country's merchandise exports’ target is seen to grow 6.8% this year – above the Philippine government's 2014 targets, a United Nations report shows.
The UN ESCAP’s exports and imports projections for the Philippines this year are some of the highest among selected Asia-Pacific economies, according to the Asia-Pacific Trade and Investment Report (APTIR) 2014 published by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
In comparison, the Philippine government expects that the value of outward shipment this year will grow by 6%, while it will be 9% for imports.
"As the recovery of the United States is expected to strengthen in late 2014, some countries that experienced export contractions in 2013 (for example, Japan, Malaysia, the Philippines, and Turkey) are forecast to enjoy significantly improved export performance (from their low-base levels)," the report said.
Export earnings in June totaled $5.44 billion, up 21.3% from $4.49 billion in June 2013. This was the fastest growth since December, when exports grew 24.9%.
Meanwhile, merchandise imports projection is expected to expand by 10.2%.
Data from the Philippine Statistics Authority showed imports fell 3.6% in June to $4.72 billion from $4.89 billion in the same month of 2013.
Sluggish Asia-Pacific trade
However, UN ESCAP said that the growth of merchandise trade by developing Asia-Pacific economies will continue to be slow for the remainder of 2014, with average growth of 4.8% for exports and 3.7% for imports.
Overall, global uncertainties especially those from China’s economic and export slowdown remain a threat to trade growth in 2014, the report said.
“The expectations of flat export growth for China in 2014 will undermine the prospects for countries supplying intermediate inputs to China for further processing and then export, including some domestic value-added," UN ESCAP said.
The APTIR report of UN ESCAP also cited that countries exporting mineral resources, raw materials, and machinery to China will not be able to rely on Chinese import demand as they did in the past.
“Total Chinese demand from infrastructure investment, domestic consumption and the services sectors will be insufficient to sustain the earlier high rates of economic growth," UN ESCAP added.
More buoyant trade by 2015
In 2015, UN ESCAP projects that the Philippines' exports and imports will expand by 6.5% and 12.2%, respectively.
UN ESCAP said that it will not be until 2015 that the Asia-Pacific region will see the return of more buoyant trade growth.
"Economic recovery in the United States through stronger consumption growth should support improved export prospects for developing Asia-Pacific exports and imports, when they are forecast to expand by 6.8% and 7.3%, respectively, in real terms," the APTIR report stated.
UN ESCAP said that while the Asia-Pacific region remains the most dynamic pole of the global economy, growth in trade and investment flows is yet to return to its levels of strength prior to the global financial crisis.
"The overarching message of this year’s report is that the lengthy shadows cast by the crisis highlight the need for economic rebalancing,” said Shamshad Akhtar, UN Under-Secretary-General and UNs ESCAP Executive Secretary.
“In part, this requires refocusing on domestic value addition of exports, rather than increasing gross exports alone," Akhtar added.
Akhtar said that regional economies also need to diversify and gain dependence from traditional sources of export-demand in Europe and the United States, by developing domestic demand and better integration with other regional economies.
“In this context, it is encouraging that APTIR 2014 shows consolidated intra-regional trade, with more than half of regional exports now directed to other Asia-Pacific countries," Akhtar said. – Rappler.com