An export-oriented economic policy has boosted the economies of the newly industrialized countries of Asia. Philippines policy makers have also realized that the Philippines cannot achieve its aim of becoming the next “economic tiger” of Asia without shifting to an export-oriented economic programme. Export promotion programmes are public policy measures which actually or potentially enhance exporting activity at the company, industry or national level.
Ideally, an export promotion policy should be backed up with an appropriate political and economic philosophy of the government. Export promotion policies should take into account the nature, size, and distribution of the individual exporting firms.
As a developing country, the Philippines really does not have much choice in the matter. It needs to increase its export volume as a matter of economic survival, and within its national context, only the public sector has the resources to provide export promotion services to small and medium-sized businesses in a cost-effective way. It was evident by the end of the 1970s, that the institutional reforms did not go far enough in achieving the major objectives of development.
Typical of most small developing country trades, Philippines export trade has been characterized by a high degree of commodity and geographic concentration. As late as 1970, ten principal traditional export commodities comprised three quarters of total exports value. The first three top dollar earners (sugar, logs and lumber and copper concentrates) easily accounted for a little more than half of total export earnings.
A definite shift to export promotion was observed in the decade of the 1970s. In spite of the export orientation reflected in exchange rate and industrial promotion policies, the structure of protection accorded by tariff policy remained basically inward looking. The general picture that emerges from the above discussion is that while foreign exchange, trade and industrial incentive policies in the seventies had taken an unmistakable shift toward export promotion, they had stopped short of completely eliminating the biases against export sales.
The basic political and economic structure continued into the 1970s, becoming generally more extreme as the economy grew more concentrated and centralized. By the 1980s the situation had reached crisis proportions and the general lack of funds and impaired functioning of the economy during the ensuring political crisis served to reduce the level of trade even without added policy restrictions. The exile of Marcos in 1986 led to a different policy orientation, involving the easing of limits on trade, but it was not until the 1990s that the Philippines more open policy was effectively codified and implemented. Broader government initiatives, including economic decentralization, demonopolization, privatization and deregulation, promotion of foreign investment, infrastructure development and export promotion have also led to toward more liberal trade. The Philippines has furthermore become more attractive internationally following its abolition of exchange controls and the implementation of a policy allowing full and immediate repatriation of earnings.
As noted Philippines policy has acknowledged the need to invest and has allowed the expansion of imports, even at the cost of rising deficits while at the same time focusing attention and resources on offsetting export production. Moreover, Philippines membership in such bodies as the General Agreement on Tariffs and Trade (GATT), the Association of Southeast Asian National (ASEAN) and Asia Pacific Economic Cooperation (APEC) commit the country to standardizing and liberalizing its foreign trade regime to an even greater degree.
Last Updated on: 28-01-2010