UN global trade update says PH lags behind in rebound

The UN Conference on Trade and Development’s (UNCTAD) global trade update was released on Tuesday and said global trade in goods has surpassed pre-pandemic levels but services trade continues to lag.

“The positive trends from the last few months of 2020 grew stronger in early 2021. In Q1 2021, the value of global trade in goods and services grew by about 4% quarter-over-quarter and by about 10% year-over-year. Global trade is expected to further rebound in Q2. In 2021, global trade is projected to grow by 16%, but the outlook remains uncertain,” UNCTAD said.

The UNCTAD report showed the Philippines scored 0.51 in export performance in the fourth quarter last year, based on an index in which a higher score indicates above-average performance. China scored 0.71, while Vietnam was at 0.59 and Korea at 0.52. Singapore was lower at 0.46 and Thailand at 0.43.

Philippine export volatility was 0.11, while Chinese and Korean exports were less vulnerable at 0.09 and 0.07, respectively. Singapore’s export volatility was at 0.01, and Thailand’s was at 0.04.

Philippine goods exports in March jumped 31.6% to $6.68 billion compared to the same month last year, according to Philippine Statistics Authority data. Export growth that month was the fastest since the 46.8% growth in September 2010. This hints at some improvement after goods exports fell 10.1% to $63.8 billion in 2020.

Philippine Exporters Confederation, Inc. (Philexport) expressed optimism on the country’s export recovery this year, noting a potential increase in garment exports after labor strikes in Myanmar slowed production.

“Mining has been allowed to resume so that has an upside too. Electronics could do better, if not due to shortages of parts,” said Philexport Chairman George T. Barcelon, referring to the recent lifting of a nine-year ban on new mining deals and the global semiconductor shortage that could last until next year.

UNCTAD noted trade rebound is stronger in developing countries compared to that of developed countries but is muted when East Asian economies are out of the picture.

“The fiscal stimulus packages, particularly in developed countries, are expected to strongly support the global trade recovery throughout 2021. The value of global trade should also rise due to positive trends across commodity prices.

Government interventions amid tensions among large economies could also restrict trade. Consumer behavior could also have changed due to the pandemic, with healthcare and communications demand increasing while travel goods demand decreasing. Some of these changes may be enduring, if so, they will be influencing the demand for foreign goods and services,” UNCTAD said.

SOURCE: Business World