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The Department of Trade and Industry (DTI) is looking at $110-billion exports for 2023, lower than the 2022 target of $122 billion to $130 billion, according to a report by Manila Bulletin.
In a presentation during the House ways and means committee hearing on the 2023 budget for the agency, the DTI has allocated P773 million for exports and investment development programs, which got the biggest allocation of the agency’s total 2023 budget. It was, however, P17 million lower than its P790 million allocation in the 2022 budget.
The 2023 DTI export forecast of $110 billion would just be enough to approximate the unmet growth targets during the two-year pandemic period.
The 2017-2022 Philippine Exports Development Plan (PEDP) targeted $102.8 billion – $105.8 billion in 2020, and $111.6 billion-$117.3 billion in 2021. For 2022, the PEDP had set a goal of $122 billion to a high of $130.8 billion.
The actual exports performance for 2020 reached only $80 billion and $87.8 billion in 2021 or 9.7 percent growth.
The proposed DTI budget in the 2023 National Expenditures Program (NEP) has been reduced by 10 percent to P22.96 billion from P24.596 billion in 2022 with the budget for micro, small and medium enterprises (MSMEs) being slashed by 35 percent.
At the hearing, some congressmen questioned the allocation of the DTI budget to other functions at the expense of the MSME development programs given the prioritization by President Ferdinand Marcos Jr. on the development and support for MSMEs.
Rep. Arlene de Brosas even questioned the budget allocation to MSMEs than the amount allocated for investment and exports development.
But DTI budget sponsor Rep. Christopher de Venecia explained that the reduction in MSME budget has already addressed with contingency plans through Public Private Partnerships. There are also commitments by regional and international counterparts for development assistance to the country’s MSMEs, which account for over 99 percent of the country’s businesses.
De Venecia also said that the P3 or the Pondo sa Pagbabago at Pag-asenso has been receiving yearly subsidies from the General Appropriations Act since it was created in 2020 in response to the severely impacted MSMEs from the pandemic.
For this year, the DTI proposed budget has allocated P1.5 billion budget for P3 loans. The P3 Program is a funding program that will provide an alternative source of financing for micro entrepreneurs that is easy and quick to access.
As Sept. 5, 2022, SB Corp has extended P11.61 billion cumulative P3 loans to 264,983 MSMEs and targeted not more than 20 percent default rate, but has only achieved a very low default two percent rate on loans under the P3 program.
Earlier, DTI Secretary Alfredo E. Pascual also said that DTI will harness private public sector partnership to extend assistance for some of the MSME programs.
“Money can come from the private sector if there is no government support,” said Pascual. For instance, he said, the Go Negosyo Center is supported by many big companies and the training centers are being supported by big industries.
“We can do it with difficulty, but we will still be able to bring MSMEs to bring to the next level of development with the help of the private sector,” he said citing potential public private partnerships.
Pascual, however, said that it would be better if the budget can be augmented so they could accelerate programs for upscaling of MSMEs.
Under the proposed DTI budget, allocation for the Office of the DTI Secretary and attached agencies was reduced by 9 percent to P19.998 billion from P21.945 billion with the Office of DTI Secretary getting the biggest cut of 22 percent to P5.216 billion from P6.684 billion while the Board of Investments, the country’s premier investment promotion agency under DTI, had its budget cut by 14 percent to P345 million from P400 million in 2022.
Budget for the Cooperative Development Authority was also decreased by 11 percent to P653 million from P733 million in 2022. The CDA was batting for additional P170 million budget for next year.
The biggest budget went to the Technical Education Skills and Development Authority with P13.470 billion, although this was P343 million lower than the P13.813 billion allotted in 2022.
Attached DTI agency Center for International Trade Exhibition and Missions will have higher budget allocation of P165 million from P153 million for 2022.