THE Bangko Sentral ng Pilipinas (BSP) expressed optimism in the country’s trade performance this year, forecasting goods exports to sustain its “better-than-expected” performance towards the end of 2021.

In a virtual briefing on Thursday, BSP Governor Benjamin Diokno said they expect a favorable trade outlook in 2021 as the economy continues to recover from the pandemic.

“This is due mainly to the broadening recovery in global economic activity amid extensive vaccine rollouts and hefty policy support in key economies,” Diokno said.

“Goods imports are also expected to pick up as domestic demand bounces back and as the government fast-tracks its major infrastructure initiatives,” he added.

In their latest balance of payments (BOP) projections in September, the BSP expects exports to grow by 14 percent from a 9.8- percent contraction in 2020.

This is alongside an acceleration of goods imports by 20 percent for 2021 from a 20.2-percent decline in 2020.

“Goods exports for the first half of the year have already reached prepandemic levels, driven mainly by manufactures, headlined by electronics and mineral products, among others,” the governor said.

Despite the optimism, the governor said their outlook on goods trade remains tentative as it continues to be clouded by uncertainty over the pace of global and domestic recovery, including that of the country’s major trading and investment partners.

According to Diokno, among the downside risks to watch for the country’s exports and manufacturing prospects include the emergence and spread of more virulent Covid-19 variants and prolonged supply chain disruptions and logistical bottlenecks.

The governor said the emergence and spread of potentially new Covid-19 variants  may result in renewed mobility restrictions, dampened consumer, and business sentiment. The prolonged supply chain disruptions and logistical bottlenecks, meanwhile, can cause further delivery delays, raw material shortages and elevated shipping rates.

The governor also said slower growth in China is a downside risk to the Philippines’s trade outlook.

“Notwithstanding these risks, the Philippine economy has sufficient buffers against external headwinds as its external sector remains healthy,” the governor said.

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