By Jenina P. Ibanez, Senior Reporter
EXPORTERS expect agricultural orders from China to slow as the country’s economic rebound fades, an industry group’s top official said.
“We expect that there might be some effects especially on agricultural products,” Philippine Exporters Confederation, Inc. (Philexport) President Sergio R. Ortiz-Luis, Jr. said by telephone. Mining exports won’t be affected, he added.
There have not been a significant cancellation in orders despite the expected slowdown, he said.
China’s economy grew by 4.9% in the third quarter, slower than expected and below the 7.9% growth in the second quarter after power shortages and supply chain constraints dampened recovery.
This poses risks to global recovery fueled by China’s raw material orders after the country quickly reopened during the initial stages of the pandemic, according to Bloomberg News.
China was the Philippines’ second-biggest export destination after the United States in the nine months through October, government data showed.
Exports to China worth $8.72 billion accounted for 15.7% of Philippine exports during the period, growing by 23% from a year earlier.
In September alone, Philippine exports to China declined by 14.7% year on year to $1.05 billion.
Despite China’s recovery slowdown, Mr. Ortiz-Luis said shipping containers that transport goods to China are available amid a global container shortage.
The global shipping industry has been facing a shortage of vessel space after demand bounced back in some countries, pushing freight rates higher and causing delays in the shipments of goods.
“There are boats that go to China even though there is a shortage,” Mr. Ortiz-Luis said in Filipino.
The economic slowdown in China poses a big challenge to global recovery, National Economic and Development Authority (NEDA) Undersecretary Rosemarie G. Edillon said.
“From a global supply perspective, the Chinese economic slowdown could increase the cost of trade because of supply chain gaps,” she said in a Viber message.
Emerging markets and exporters could experience slower demand from China, she added. “For the Philippines, our strong macroeconomic fundamentals are expected to provide resiliency against external shocks, including a China slowdown.”
Trade and investment opportunities from China remain despite its slower economic growth, Trade Secretary Ramon M. Lopez said.
“There is still optimism but it can be viewed with caution given their slowdown, so we need to watch this development closely,” he said in a Viber message.
Mr. Lopez said the country should continue to develop manufacturing capacity for higher value-added products, diversify goods and services and expand market destinations.
The government should continue to pursue economic reforms such as opening up the country to more foreign investment, build on the infrastructure program and boost the country’s foreign trade agreements, he added.