Revisiting Our Exports

Our economy shows resilience amid various challenges, but one sector that needs further improvement is our exports that lag behind imports in terms of growth.

Boosting our exports will help cure our widening trade deficit and prevent the depreciation of the peso against the US dollar and other currencies.

While we have become a major service exporter, our merchandise goods exports continue to languish. Our monthly imports are now double our exports, and if this gap continues over the coming years, we may deplete our foreign exchange reserves to pay for foreign products.

Strong imports led to a nine-month trade deficit of $46.65 billion, per data from the Philippine Statistics Authority. Such deficit, or the difference between the value of exports and imports, affects our current account—the country’s record of financial transactions with the rest of the world. The Bangko Sentral ng Pilipinas expects our 2022 current account to register a deficit of over $20 billion, or about 5 percent of the gross domestic product.

We import most of our fuel, not to mention food products such as rice, wheat, milk and dairy items, poultry products, and temperate fruits such as apple, pear, grapes and orange whose demand normally peaks in December. The record inflation in many countries made the costs of these products more expensive.

We heavily import crude and refined petroleum products. We purchase vehicles and spare parts made in other countries. Most of the smartphones, tablets, laptops, desktops and other popular consumer electronics are imported. We pay in US dollars or other currencies for these items.

As the peso now hovers between 58 and 59 against the US dollar, or a depreciation of about 12 percent to 15 percent since the start of the year, we have achieved a competitive advantage in terms of product pricing. Thus, it is time to expand our exports and take advantage of the favorable exchange rate.

The renewed focus of President Ferdinand Marcos Jr. on agriculture aims to achieve food security and price stability for the benefit of our people. If we could increase our rice harvest, we may reduce our heavy reliance on rice-exporting countries, such as Vietnam and Thailand. We could even become a net rice-exporting nation one day.

We need to diversify our exports sector to include more products beyond our traditional output, such as coconut, sugar, bananas, garments, furniture, electronics, copper metal and other mineral products.

I hope that one day, we can export finished electronic items, appliances, gadgets, as well as packaged food products, large machinery, cars, vessels and even aircraft. A much more diversified export sector will require major foreign investments and technology transfer. This is why President Marcos visits other countries to discuss investment and trade opportunities with world leaders and executives of multinational groups.

Aside from investments, we need to enhance our branding strategy that will elevate Philippine exports as world-class products, like the ones sold by the US, Japan, Germany, Switzerland and other European countries. European fashion brands, for one, have fetched higher value because of their adept marketing approach that involves promoting a product or crop of a particular region as something unique and endemic to that area.

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