The Philippines is expected to lose $300 million in export revenues as the coronavirus disease 2019 (Covid-19) slowed down China’s exports inintermediate inputs, a study published by United Nations Conference on Trade and Development (UNCTAD) showed.
According to the UNCTAD study, the 2-percent reduction of China exports in intermediate inputs that are integrated in the global value chains have affected many economies around the world, including the Philippines.
UNCTAD data showed that by sectors in the Philippines, the biggest loss is seen in communication equipment which is expected to lose $115 million in exports.
This is followed by office machinery, with exports seen to reduce by $77 million; electrical machinery, to lose $42 million; and automotive to lose exports revenues of $22 million.
“Chinese manufacturing is essential to many global value chains, especially those related to precision instruments, machinery, automotive, and communication equipment. Any significant disruption in China’s supply in these sectors is deemed to substantially affect producers in the rest of the world,” the UNCTAD report said.
But the Philippines is not one of the most impacted economies as Covid-19 hits the manufacturing powerhouse.
UNCTAD cited that the most affected economies, which industries are reliant on Chinese suppliers, are European Union (EU), the United States, Japan, South Korea, Taiwan, Vietnam, and Singapore.
UNCTAD forecast that reduction to EU’s exports due to slowdown in Chinese exports of intermediate inputs will stand at $15.6 billion; $5.7 billion for the US; $5.2 billion for Japan; $3.8 billion for South Korea; $2.6 billion for Taiwan; $2.3 billion for Vietnam; and $2.2 billion for Singapore.
“China has become the main supplier of intermediate inputs for manufacturing companies abroad. As of today, about 20 percent of global trade in manufacturing intermediate products originates from China, up from 4 percent in 2002,” the study noted. (PNA)