MANILA, Dec 20, 2021, Philstar. The Philippines can tap about $49 billion worth of exports by addressing market frictions and investing in increased production, the International Trade Center (ITC) said, The Philippine Star reported.
In a trade brief, ITC, a joint agency of the World Trade Organization and the United Nations, said the country has an unrealized export potential of $49 billion, of which $20 billion are caused by product-market-specific frictions and another $29 billion driven by the expected economic growth in the Philippines and its target markets.
“Realizing exports currently hampered by frictions requires identifying and addressing these frictions. To tap into growth-based export opportunities, it is necessary to ensure sufficient investment in additional production,” ITC said.
It said the most important market region offering opportunities for Philippine export growth is East Asia.
Other markets seen to provide opportunities for Philippine exports to grow are the European Union, Association of Southeast Asian Nations (ASEAN) and North America.
“Opportunities in East Asia, ASEAN and North America are mostly driven by expected GDP (gross domestic product) growth, while trade with the EU is characterized by a relatively high level of frictions,” ITC said.
In terms of products, ITC said agriculture, food, and beverage have an export potential of approximately $10 billion, and 51 percent, of which has yet to be tapped.
The untapped export potential for these products is seen largest in the EU, where frictions are currently high.
“Therefore, identifying and addressing frictions that prevent exports to the EU may open up important opportunities,” ITC said.
Among the products identified by ITC with high growth potential for Philippine exports include bananas, pineapples and tuna.
It said the most important complex value chains for the country are coconut and processed food, while cocoa also offers growth prospects.
“Promising new products that the Philippines could start exporting and which would face high demand in world markets include coffee and palm oil,” ITC said.
ITC also said sectors with a large share of technologically advanced products and important export growth potential can help the Philippines have higher exports.
“The most important sectors combining these characteristics are motor vehicles and parts, plastics and rubber, optical products, watches and medical instruments, and machinery and electricity,” ITC said.
ITC said a new potential product that is technologically advanced and has strong global demand the Philippines can export are motor vehicles.
It added there are other opportunities for the country to diversify exports in different manufacturing sectors such as chemicals, machinery and electricity, electronic equipment and optical products, watches and medical instruments.