29 April 2019
By Gina Yap | Market Innovation Division (MID) | DTI-Export Marketing Bureau
Published also in Business Mirror
IN 2018, the US was the biggest export market (out of 211 Philippine markets), fourth-largest import supplier (out of 198 suppliers) and the third-largest major trading partner of the Philippines (out of 221 trading partners).
Philippine exports to the US increased by 9.13 percent from $9.66 billion in 2017 to $10.54 billion in 2018 due mainly to the increase in exports of semiconductor devices manufactured from materials on consignment basis; other parts of airplanes or helicopters; photosensitive semiconductor devices; transistors, other than photosensitive transistors; and static converters.
Total bilateral trade was valued at $18.36 billion. One of the factors that contributed to the growth of Philippine exports is the trade preference program or the Generalized Scheme of Preferences (GSP) granted by the US to the Philippines.
Under the US GSP program, tariffs are eliminated on about 5,000 tariff lines if beneficiary developing countries meet the eligibility criteria established by US Congress. GSP criteria include, among others, respecting arbitral awards in favor of US citizens or corporations, combating child labor, respecting internationally recognized worker rights, providing adequate and effective intellectual-property protection, and providing the US with equitable and reasonable market access.
In 2018, US GSP imports from the Philippines stood at $1.73 billion, an increase of 15.57 percent from $1.49 billion in 2017.
Recently, the Office of the United States Trade Representative announced that India and Turkey will be removed from the US GSP.
In 2018, India exported goods worth $6.31 billion under the GSP. The majority of India’s exports to the US consisted of intermediate goods; organic chemicals, auto parts, furniture, leather goods, textiles and apparel, electrical parts, stone, sand and cement, plastic materials, rubber, wood, glass materials, gem and jewelry.
Turkey exported $1.92 billion worth of goods under the US GSP Program in 2018. The leading GSP import categories were vehicles and vehicle parts, jewelry and precious metals, and stone articles.
Philippine exporters of similar products may find their products are now more price competitive to US buyers and importers.