By Andrea E. San Juan, October 7, 2022; Business Mirror
DESPITE the slow down of trade growth in 2023 projected by the World Trade Organization (WTO), the Philippines said it is banking on the resilience of its exports sector.
“Of course we are always affected by global developments especially when it comes to our exports sector but we are banking on the resilience that they have exhibited during this pandemic and post-pandemic,” Department of Trade and Industry (DTI) Undersecretary Ceferino Rodolfo told reporters on Thursday on the sidelines of the launch of World Bank’s report, A New Dawn for Global Value Chain Participation in the Philippines.
The Trade undersecretary recalled the first few months in 2022, when he said, “we have already surpassed our prepandemic levels.”
Rodolfo pinned his hopes on the country’s electronics and food sectors, which he deemed “critical” even in the face of global challenges.
“Even on the ground, we can see that our exporters, particularly those in number one, [the] electronics sector [and then the] food sector. These are critical, I would say, hopefully not too sensitive when it comes to global downturns,” he added.
This, despite the WTO noting in a statement on Wednesday that “World trade is expected to lose momentum in the second half of 2022 and remain subdued in 2023 as multiple shocks weigh on the global economy.”
The multilateral trading body said WTO economists now predict global merchandise trade volumes will grow by 3.5 percent in 2022—slightly better than the 3-percent forecast in April. For 2023, however, it noted that the economists foresee a 1-percent increase—down sharply from the previous estimate of 3.4 percent.
According to the WTO, import demand is expected to “soften” as growth slows in major economies for “different reasons.”
For instance, it noted that in Europe, high energy prices stemming from the Russia-Ukraine war will squeeze household spending and raise manufacturing costs. In the United States, it noted, monetary policy tightening will hit “interest-sensitive” spending in areas such as housing, motor vehicles and fixed investment.
As for China, the WTO said, it continues to grapple with Covid-19 outbreaks and production disruptions paired with “weak external demand.”
Meanwhile, the WTO pointed out that growing import bills for fuels, food and fertilizers could lead to food insecurity and debt distress in developing countries.
The Philippines has been a member of the WTO since January 1,1995.
For her part, WTO Director-General Ngozi Okonjo-Iweala noted, “While trade restrictions may be a tempting response to the supply vulnerabilities that have been exposed by the shocks of the past two years, a retrenchment of global supply chains would only deepen inflationary pressures, leading to slower economic growth and reduced living standards over time.”
With this, Okonjo-Iweala said what the members need is a “deeper, more diversified and less concentrated base for producing goods and services.” She added this would contribute to supply resilience and long-term price stability by mitigating exposure to extreme weather events and “other localized disruptions.”
