EXPORTERS are shifting their focus to services trade, particularly in tourism, for the remainder of the year to make up for the sluggish performance of merchandise shipments.
Philippine Exporters Confederation Inc. President Sergio R. Ortiz-Luis Jr. disclosed on Friday that traders are looking to take advantage of the growing demand for tourism-related services to compensate for the lower requirement for merchandise goods. He said the sector grew around 35 percent between 2016 and 2017, twice the growth of the business-process outsourcing (BPO) industry during the period.
It is but wise for exporters to exploit tourism at a time they are catching up, as it is one of the five groups accounting for a hefty chunk of services exports, he added.
“We are also rooting for tourism. Though based only on its growth rate in 2016 to 2017, tourism-related services exports surged at 35 percent, twice that of BPO,” Ortiz-Luis said in a statement. While acknowledging that tourism-related services exports came “from a lower base,” he said the robust growth nonetheless “emphasiz[ed] its potential.”
Trade and tourism, along with computer and information technology, freight, construction and audiovisual, made up for 83.2 percent, or about $26 billion, of services exports in 2016.
Ortiz-Luis said exporters are reeling from the slower merchandise trade volume brought about by the tariff war between the United States and China, among others. This, in spite of claims made by trade officials that the trade conflict between the world’s largest economies will not dent the country’s export activities.
Based on records from the Philippine Statistics Authority (PSA), merchandise exports as of June slid 0.8 percent to $34.11 billion, from $34.29 billion during the same period last year.
Electronic items, the country’s largest export good, grew flat at 0.7 percent during the stretch. Semiconductor firms are facing another problem aside from the tariff war: the looming passage of the tax reform bill that will strip away incentives for economic zone firms.
As such, industry players admitted they are stalling plans to expand and are holding on to their capital in anticipation of changes in the corporate tax and incentives regime.
Estimates provided by the industry revealed the Philippines lost over $1 billion in investments due to the government’s plan to rationalize tax perks. These investments, industry players said, could have set up new shops, which, in turn, would create jobs and improve production and export capacity.