Philippines seeks to broaden non-electronics exports amid structural cost pressures

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Philippines seeks to broaden exports

Highlights

Philippine merchandise exports rose 35.6% to $9.87 billion in September, hitting the highest value since 1991, driven mainly by electronics.
Non-electronics exports struggled in September, with processed tropical fruit down 20.9% to $31.47 million and mineral exports down 20.7% to $333.93 million.
Economists highlight structural bottlenecks—high electricity costs, weak logistics, skills shortages—as constraints on diversification beyond electronics and agriculture.

Export growth highlights concentration risks

As reported by BusinessWorld Online, economists say the government needs to strengthen the competitiveness of non-electronics industries rather than only promote existing export products in more markets.

Leonardo A. Lanzona, an economics professor at Ateneo De Manila, says export strategy should focus on building capabilities that help industries compete, innovate, and move up the value chain. He says technology, research, and skills development incentives, along with stronger links between globally competitive firms and local producers, would help develop more export-oriented sectors.

In September, merchandise exports rise 35.6% to $9.87 billion, preliminary Philippine Statistics Authority data show. The increase is driven mainly by electronics products, particularly semiconductors, and marks the highest export value since the series began in 1991.

Analysts warn, however, that dependence on electronics leaves the economy exposed to swings in global technology investment. The same data show weaker performance in several other export categories, with processed tropical fruit exports falling 20.9% to $31.47 million, pineapple and pineapple products dropping 58.6% to $30.93 million, and mineral exports slipping 20.7% to $333.93 million in September.

Agriculture and skills seen as key to diversification

Victor A. Abola, senior economist at the University of Asia & the Pacific School of Economics, says agricultural production needs stronger incentives to serve export markets, especially as food security remains a global concern. He says support should extend beyond farmers and cooperatives to mid-sized and large corporations, while noting continued demand for coconut products in industrial use and for pineapple in Europe and other advanced economies.

Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, says weaker export performance outside electronics reflects long-running structural bottlenecks. He points to relatively high and sometimes unreliable electricity costs, expensive logistics, and persistent skills shortages, adding that limited public education investment and brain drain continue to constrain the development of other export industries.

Lanzona says traditional sectors such as agriculture remain held back by low productivity, fragmented production, and limited processing capacity. That leaves the Philippines exporting more raw or minimally processed goods, reducing its ability to capture higher-value opportunities through downstream activities and innovation.

Our earlier article on the Philippines widening access to Malaysia’s halal import market explained how an additional domestic halal certification body gained recognition from Malaysia’s JAKIM, giving exporters more accredited certification options. We noted that stronger certification capacity can support a broader push to grow halal-linked exports and investment across multiple sectors, turning compliance infrastructure into a practical tool for trade expansion.

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