Gradual and calibrated re-opening of the economy, as well as regulatory reforms and technological innovations, are needed for the country’s trade and overall economic recovery, the National Economic and Development Authority (NEDA) said.
The Philippine Statistics Authority reported that the country’s merchandise trade performance registered a sharp contraction of 21 percent in August 2020, mainly due to the stricter quarantine measures implemented during the reporting period.
Between August 4 to 18, 2020, Metro Manila, Bulacan, Cavite, Laguna, and Rizal were placed under the Modified Enhanced Community Quarantine in response to rising COVID-19 cases. As a result, the trade performance reversed after three months of showing gradual signs of recovery.
“The August trade performance is a clear indication that gains from reopening the economy can easily be reversed when we impose strict lockdowns that restrict economic activity. We need to keep this in mind if we wish to regain our growth trajectory,” said Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua.
Merchandise exports contracted by 18.6 percent, dragged by steep declines across all major commodity groups. This represents a significant decline in export performance compared to the 9.1 percent decline in July.
Meanwhile, imports fell by 22.6 percent. This is marginally better compared to the July 2020 decline of 23.8 percent, as moderate increases were noted for some commodity segments.
“The government will continue its efforts to gradually open the economy and ensure the availability of more and safer public transportation, in tandem with strict observance of health protocols. We also need to facilitate trade and improve our export competitiveness,” according to Chua.
“Programs focused on streamlining, reviewing of regulations, and using technological innovations, including digitalization would also be vital in keeping the economy on track,” the NEDA chief added.
Recently, the Bureau of Customs (BOC) rolled out its web-based Electronic Tracking of Containerized Cargo (E-TRACC) system, which tracks inland movement of containerized cargoes during transit.
The BOC also initiated measures under the customs modernization program, including the automation of frontline transaction with the rollout of the Trade Engine – a system designed to improve accuracy of recording and valuation of shipments.
Chua also said efforts to facilitate trade needs to be complemented with continued efforts to our investment regime.
“For the Philippines to be seen as a suitable destination for foreign direct investment, it is crucial for us to implement structural reforms that will make the country an attractive investment destination,” he said.
NEDA continues to pursue the enactment of legislations that will provide a competitive and productive environment for businesses through amendments to the Foreign Investment Act, Retail Trade Liberalization Act and the Public Service Act.