Tatak Pinoy seen encouraging shift to higher-value products
THE Department of Trade and Industry (DTI) said it is betting on a boost from the Tatak Pinoy Act, which it says will incentivize exporters to focus on products with higher-value content where the Philippines enjoys a competitive advantage.
“We will need to define our priority sectors where we have an advantage that we can pursue,” Trade Secretary Alfredo E. Pascual said on the sidelines of the Tatak Pinoy Act Forum on Monday.
“Our main objective is to create products that will improve our export performance because, if you look at our neighbors, we are lagging,” he added.
Republic Act No. 11981, or the Tatak Pinoy (Proudly Filipino) law, aims to elevate the Philippines’ position in the global value chain by encouraging companies to raise the quality of their products.
Mr. Pascual said products of higher complexity tend to raise a country’s export earnings.
Citing the Atlas Economic Complexity report for 2021, he said that the Philippines was 33rd globally in the complexity index and fourth in Southeast Asia, ahead of Vietnam and Indonesia.
However, he said three years have passed since the report was released, and Indonesia and Vietnam have made significant strides in diversifying into more complex product categories.
“Between 2006 and 2021, our country has only ventured into 30 new export products, contributing $41 to our GDP (gross domestic product) per capita. In contrast, Vietnam has ventured into 41 new products, boosting its GDP per capita by almost $1,500,” he said.
He added that export volume of $74 billion pales in comparison to Indonesia’s $231 billion, Thailand’s $266 billion, and Vietnam’s $355 billion.
“This stark contrast highlights the urgent need for a more robust approach to enhance the global competitiveness of our industries and attract more export-oriented high-tech manufacturing companies to make the Philippines their production hub,” Mr. Pascual said.
Bianca Pearl R. Sykimte, director of the DTI’s Export Marketing Bureau, said that the DTI is “cautiously optimistic” that exports will grow this year due to growth in service exports and through the Tatak Pinoy Act.
In particular, she said exports are still expected to hit the targets set under the Philippine Development Plan (PDP) after information technology and business process management (IT-BPM) dollar receipts surpass overseas Filipino worker (OFW) remittances.
“If you look at our dollar receipts in IT-BPM compared to OFW remittances, I think IT-BPM receipts are already at $35 million, while OFW remittances are around $33 billion. So, services are still doing well,” Ms. Sykimte said.
However, she said that although trade is improving, the 2024 total is still lower than that of 2022, which is reckoned to be the start of the post-pandemic recovery.
“This is one of our considerations, but compared to last year, of course, we are faring better,” she added.
She said the Export Development Council is set to recalibrate the targets contained in the Philippine Export Development Plan (PEDP) by the third quarter.
“It may, of course, affect the succeeding targets since the base will be lowered because even at the start of the implementation of the PEDP, we were not able to achieve the targets,” she added.
Meanwhile, she said that the DTI plans to use the Tatak Pinoy Act to deliver for the PEDP, as most of the projects under the law are related to export development.
The PEDP estimates merchandise and services exports for 2024 at $143.4 billion, much higher than the $107-billion export target set in the PDP.
The Philippine Statistics Authority reported that exports totaled $30.84 billion in the five months to May, up 7.8% from a year earlier. — Justine Irish D. Tabile