The Philippines’ premier economic advisory agency, the National Economic and Development Authority (NEDA), noted that the improvement in the country’s trade performance in September 2020 suggests that the country’s approach to gradually reopen the economy along with the strict observance of health protocols, puts it on the right track towards economic recovery.
The Philippine Statistics Authority (PSA) reported that the country’s merchandise trade performance had registered a milder decline of 9.2% in September 2020 compared to the previous month’s 17.9% contraction. The relaxation of quarantine measures supported an improvement in trade activities. In particular, merchandise exports reversed a six-month-long decline to post a 2.2% growth as outward shipments continued to improve. Imports fell by 16.5% but showed slower contractions in major commodities – including capital goods, raw materials and intermediate goods, mineral fuels, and consumer goods – compared to the previous month.
While the government continues its efforts to manage the COVID-19 pandemic, measures to support businesses and consumers under the Bayanihan 2 Act which provides for a stimulus of PHP 165 billion (USD 3.43 billion) in total, will help the economy recover faster. The government will also need to pass the remaining recovery programs, including the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, the Government Financial Institutions Unified Initiative to Distressed Enterprises for Economic Recovery (GUIDE) bill, and the Financial Institutions Strategy Transfer (FIST) bill. These are expected to further support the recovery of COVID-affected sectors while promoting the resurgence of trade.
Other reforms that NEDA is pushing include legislative measures that seek to amend the Public Service Act (PSA), the Foreign Investment Act (FIA), and the Retail Trade Liberalization (RTL) Act. These are expected to spur investments in logistics and critical infrastructure that will help exporters increase productivity and competitiveness.
(Source: National Economic Development Authority – NEDA)