The country will continue to focus on reinforcing integration of micro, small and medium enterprises (MSMEs) into global value chains (GVCs) and maximizing free trade agreements (FTAs) as it strengthens the global position of export sectors.
The Philippine Development Report (PDR) 2024 said supporting more firms and enabling them to enter global markets and participate in GVCs can boost exports and foster product diversification beyond major exports of semiconductors and electronics.
“Investing in the upgrading of certification testing facilities and improving access to the same will help manufacturers meet standards and facilitate compliance to improve the overall quality of export products. It can also allow new entry or regain competitiveness in global markets,” it said.
To better identify firm needs, the Department of Trade and Industry (DTI) has started developing a customer relationship management system that will provide feedback and strengthen relationships with its wide range of stakeholders, including MSMEs.
“This should be complemented with the development of an early warning system for the government to recognize firm stress points and implement the appropriate preventive measures. To provide responsive support, the system should be able to utilize existing firm-level monitoring data collected from MSMEs while improved data collection and processing is still ongoing,” the report said.
To maximize FTAs, PDR 2024 said trade relations must be continually forged by utilizing and strengthening existing agreements and exploring the feasibility of new connections.
It underscored the need to enhance efforts of both the government and private sector to ensure the effective utilization of existing FTAs.
“This involves boosting market intelligence capabilities to identify opportunities in partner countries and providing capacity-building programs to help businesses, especially MSMEs, navigate the complexities of FTA provisions,” it said.
The report said conducting regular reviews of FTA performance to identify underutilized areas and addressing gaps in implementation is also imperative.
“Reinforcing trade facilitation through digital systems, such as a unified customs processing platform, will reduce administrative burdens and ensure that exporters can maximize market information and realize gains negotiated from these partnerships,” it added.
To build on efforts to resolve key constraints to exports, PDR 2024 highlighted the need to address long-standing implementation issues in existing programs and projects aimed at improving export performance.
“While various initiatives have been launched to enhance the competitiveness of exporters, many of these programs face persistent implementation issues, such as funding concerns, challenges with third party providers, and logistical and organizational constraints that hinder full implementation,” it said.
The report said electronic customs procedures and digitalization programs may be further improved by trimming processing times, ensuring minimal bureaucratic red tape, providing a quality experience, and reducing costs for exporting clients.
“These improvements will not only optimize export operations but also provide a seamless experience for exporters, boosting confidence in our support mechanisms for boosting trade,” it added.