Philippine export growth to lag in Southeast Asia

MANILA, Philippines — The Philippines is expected to lag behind most of its Southeast Asian neighbors in terms of merchandise export growth this year and next, according to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

In its Asia Pacific Trade and Investment Trends 2022/2023 report on trade in goods and services, ESCAP projected a 0.5-percent contraction for Philippine merchandise exports value this year.

Other Southeast Asian countries covered by the report are expected to post growth in merchandise export value this year, including Malaysia at 12.2 percent, Singapore at 18.6 percent, Thailand at 22 percent, Indonesia at 23.2 percent and Vietnam at 42.5 percent.

Data from the Philippine Statistics Authority showed Philippine merchandise export earnings amounted to $58.31 billion in the nine months to September or 4.7 percent higher than the $55.69 billion in the same period a year ago.

ESCAP said Southeast Asia is the only sub-region projected to register strong real trade growth in terms of merchandise exports this year.

For Asia Pacific, ESCAP is forecasting a 9.7 percent growth in merchandise export value this year.

“In Asia and the Pacific, trade is expected to almost stagnate with the poor trade performance by the Russian Federation influencing these figures,” ESCAP said.

Excluding the Russian Federation, it said the region’s merchandise export value is expected to grow by 10.2 percent this year.

For next year, ESCAP’s report showed the value of Philippine merchandise exports is seen to grow by one percent, among the lowest in Southeast Asia.

Those expected to post faster growth in merchandise export value next year are Malaysia at 4.4 percent, Thailand at 7.4 percent and Vietnam at 8.8 percent.

Meanwhile, ESCAP is forecasting stagnant growth for Singapore’s merchandise exports, and a 3.6 percent drop for Indonesia’s exports of goods next year.

Should monetary tightening measures put in place this year effectively tame inflation next year, ESCAP expects merchandise exports of Asia Pacific as a whole to grow by 1.2 percent next year.

Excluding Russia, ESCAP is forecasting a 1.9 percent growth for Asia Pacific’s merchandise export value next year.

ESCAP said downside risks to the global economy, however, may affect the forecasts.

“Indeed, the potential re-emergence of COVID-19 lockdowns, the evolution of the war in Ukraine, and the heightened risk of a global economic recession may prove challenging in going forward,” it said.

In terms of commercial services exports, ESCAP expects the Philippines to post a 13.9 percent growth this year, ahead of Singapore’s 7.4 percent, but behind Malaysia’s 20.5 percent, Indonesia’s 22.8 percent, Vietnam’s 23.7 percent, and Thailand’s 133.5 percent.

“Across sub-regions, Southeast Asia is expected to register the strongest export performance following the removal of travel restrictions and subsequent tourism recovery in most sub-regional economies,” ESCAP said.

For Asia Pacific’s commercial services exports value, the ESCAP report showed this is forecast to post an 8.7 percent growth this year.

For next year, Philippine commercial services exports are expected to post a 6.6 percent growth, the same pace as Malaysia, and faster than Singapore’s 3.9 percent.

Meanwhile, Southeast Asian countries expected to post faster growth than the Philippines are Indonesia at 23.8 percent, Thailand at 36.4 percent, and Vietnam at 39.1 percent.

For Asia Pacific’s commercial services exports, ESCAP is forecasting a 7.5 percent growth next year.

ESCAP said the growth is expected to be supported by further easing of travel restrictions in the region and demand for transport and business services.

“However, uncertainties surrounding global merchandise trade’s short-term performance, as well as potential COVID-19 complications and restrictions – especially in China, the largest importer of travel services – remain the chief downside risks to commercial services trade in the near future,” it said.