DTI ‘cautiously optimistic’ export growth may exceed 3% this year

By Beatriz Marie D. Cruz, Senior Reporter

PHILIPPINE MERCHANDISE exports are expected to outpace the government’s 3% projection, amid a strong performance so far this year, the Department of Trade and Industry (DTI) said.

“We’re optimistic that of course, we’re going to grow,” Bianca Pearl R. Sykimte, director of the DTI-Export Marketing Bureau (EMB), told reporters on the sidelines of an event last week.

“We’ve seen the DBCC (Development Budget Coordination Committee) forecast, which is about 3% growth in exported goods… We are cautiously optimistic that we’ll surpass that,” she said.

Ms. Sykimte noted that the double-digit growth in exports signals that export growth will remain strong this year.

The DBCC projects goods export growth at 3% this year, 4% from 2027 to 2029, and 5% by 2030.

In the first seven months of the year, exports climbed by 12.9% to $54.92 billion from $48.69 billion last year, driven by exports of electronic products.

Electronics accounted for 21.1% of total exports in the January-to-July period at $30.92 billion, as semiconductor exports rose amid the global boom in artificial intelligence (AI).

Sought for comment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the AI boom is expected to continue driving Philippine export growth.

“A bright spot for Philippine exports has been the boom in AI-related spending and demand worldwide, especially with the large investments by the world’s biggest tech companies,” he said in a Viber message.

Chinbank Research noted electronics “remain the heavyweight of Philippine trade, driving both export growth and demand for imported components.”

“The sector is powering export growth, but its heavy reliance on imported components is also widening the trade deficit, with electronic inputs now rivaling oil as a major import item,” it said.

PSA data showed the January-to-July deficit ballooned by 29.2% to $37.34 billion from $28.91 billion in the same period a year ago.

DCTS
Meanwhile, the EMB said it is coordinating with the UK government to help more Philippine exporters leverage the Developing Countries Trading Scheme (DCTS) and improve its access to markets in the UK.

“It’s really a discussion with the UK government — with them providing insights on the level of utilization — so that we can work together in terms of promoting utilization in sectors,” she said. “We can do much more in terms of promoting.”

The UK’s DCTS allows the Philippines to enjoy simplified trading rules and duty-free exports to the UK on over 80% of eligible products.

UK Trade Adviser Ellie Parker recently said that about £92 million (or P7.7 billion) worth of Philippine goods that entered the UK did not benefit from lower tariffs under the DCTS last year.

This is significantly below the £299 million worth of eligible Philippine exports to the UK last year under the DCTS, she said.

The DCTS, which replaced the UK’s Generalised Scheme of Preferences (GSP) in 2023, provides reduced tariffs and relaxed rules of origin to 65 developing countries.

The Philippines remains eligible for the DCTS even though it was re-classified as an upper-middle income country (UMIC) in July.

Under DCTS rules, a country that receives UMIC status for three straight years would no longer receive DCTS perks.

Ms. Sykimte noted that the DTI’s ongoing negotiations for free trade agreements (FTAs) would help ensure that Philippine goods maintain its tariff perks even as an upper-middle income country.

“Part of the strategy is, again, as the [Trade] Secretary mentioned, negotiate FTAs with our trading partners… Market diversification has always been a strategy for us,” Ms. Sykimte said.

Over 60% of the Philippines’ exported products go to markets where it has trade preferences, she added.

The country is looking to finish negotiations for five FTAs this year, Trade Secretary Maria Cristina A. Roque said earlier.

She has said the country is on track to finish FTA talks with Canada and the European Union, as well as the updated Japan-Philippines Economic Partnership Agreement, this year.

The Philippines has sealed free trade deals with the United Arab Emirates and Chile this year.