PHL needs to grow export markets for non-electronic goods — analysts

While the Philippines achieved a record 35.6% growth in merchandise exports in September, largely propelled by electronics, analysts point to a contrasting trend in other sectors. Exports of agricultural products, such as processed tropical fruit and pineapple, saw declines of 20.9% and 58.6% respectively, while mineral exports also fell by 20.7%. This divergence highlights a concentration of growth that may mask underlying vulnerabilities.

Economists attribute the struggles of traditional industries like agriculture to systemic issues. Leonardo A. Lanzona, an economics professor, notes that these sectors face low productivity, fragmented production, and limited processing capabilities. This often results in the Philippines exporting raw or minimally processed commodities instead of capturing greater value through innovation and downstream activities. Victor A. Abola, a senior economist, suggests that agricultural production requires further incentives, particularly for mid-to-large corporations, to meet global food security demands.

Miguel Chanco, Chief Emerging Asia Economist, identifies broader structural bottlenecks hindering export diversification. These include the relatively high cost and unreliability of electricity, significant logistics expenses, and widespread skills shortages. He also links the lack of investment in public education and a persistent "brain drain" to the limited development of non-electronic export industries, underscoring the need for investments in technology, research, and skills development to build competitive capabilities.