Philippines cuts export targets as global risks deepen

The Philippines has sharply lowered its export targets for this year until 2028 amid geopolitical tensions, renewed trade barriers, and persistent disruptions in major shipping routes that continue to squeeze global supply chains and dampen demand.

Under the revised Philippine Export Development Plan (PEDP), exports are now expected to reach USD 110.8 billion to USD 113.4 billion this year, USD 116.1 billion to USD 120.2 billion in 2026, USD 123.3 billion to USD 127.4 billion in 2027, and USD 132.8 billion to USD 135.1 billion in 2028, the Export Development Council (EDC) said on Thursday.

These are all substantially below the earlier projections of USD 163.6 billion, USD 186.7 billion, USD 212.1 billion, and USD 240.5 billion for those respective years. For 2025, the EDC now forecasts export growth of about 3.55% from the original 14.1%.

“The rate of growth has decelerated in the last two years, so we have to adjust,” EDC Executive Director Bianca Pearl R. Sykimte said at the National Export Congress. She cited mounting global headwinds — rising political tensions, uncertainty surrounding US tariff policies and bottlenecks along key shipping routes — as the main reasons for the reset.

Merchandise and services exports reached USD 107 billion in 2024 and USD 103.7 billion in 2023, both falling short of the plan’s earlier path. Data from the Philippine Statistics Authority show merchandise exports in the first 10 months at USD 70.43 billion, higher than USD 61.9 billion a year ago.

Gains were driven largely by electronics and semiconductors, though the EDC noted that the improvement remained uneven across sectors.

Ms. Sykimte said the revised figures also reflect weaker global demand, which has weighed on key Philippine export categories even as electronics, automotive components and several agro-based shipments posted modest recovery.

“Our frontliners have been navigating a global economy that is volatile in its pace of change, uncertain in its directions, complex in its interdependencies and ambiguous in outcomes,” she added.

Even with the adjustments, sectoral performance suggests the country will continue to trail regional peers.

The Philippines ranked 49^th globally in merchandise exports in 2024 and sixth in the Association of Southeast Asian Nations, behind Thailand, Vietnam, Malaysia, Indonesia and Singapore.

“Even if we triple our exports, it is not enough to catch up with our nearest competitor, Indonesia,” Ms. Sykimte said, noting that larger economies have benefited from stronger inflows of export-driven investments.

The EDC flagged the country’s heavy reliance on a small set of markets. Ten destinations — the US, Japan, Hong Kong, China, South Korea, Thailand, Singapore, the Netherlands, Taiwan and Germany — account for about 80% of total exports.

While Philippine goods reach about 200 markets, only 32 absorb more than USD 100 million annually, and only 14 exceed USD 1 billion. Just two markets take in more than USD 10 billion worth of Philippine shipments.

Ms. Sykimte said this concentration exposes the country to external shocks and foreign policy changes in a few major economies.

Diversification, she said, would be central to the PEDP’s revised approach. The government aims to secure more preferential trade arrangements through bilateral and regional agreements while easing market access barriers in existing destinations.

The revised PEDP retains a three-pillar strategy: expanding market access through trade policy, building sectoral capabilities and strengthening trade promotion to link exporters with buyers overseas.

The plan also seeks to attract more export-oriented foreign investment, which Ms. Sykimte said has helped scale up export ecosystems in other countries.

Still, Ms. Sykimte said the country will post positive export growth this year, supported in part by the stronger performance seen in recent months. Average monthly goods exports reached USD 7.2 billion in the past five months, up from the typical USD 5 billion to USD 6 billion range in previous years.

Electronics and semiconductors are expected to remain the main drivers, though she noted that October’s gains were broad-based across about 28 sectors.

Even so, she stressed that the Philippines needs sustained reforms to regain competitiveness.

“Given the size of our competitors in the region and globally, it is harder for the Philippines to be seen as a supplier in the global market,” she said. The country needs to broaden its capabilities and strengthen its position if it wants to keep pace, she added. — JIDT