AS THE novel coronavirus spread threatens the already struggling global trade, Filipino exporters worry about the impact it could have on their business.
Sergio Ortiz-Luis, president of the Philippine Exporters Confederation (Philexport), voiced the industry’s concerns amid escalating coronavirus-induced economic pain.
“Some of these include late shipments, cancelled orders, and loss of buyers and suppliers. These have resulted in higher cost of logistics and raw materials, as well as lower sales,” said Ortiz-Luis.
“We did not initially anticipate that the outbreak will spread in such overwhelming speed and scale, causing severe global disruption and losses in various ways. A major casualty is the global supply chain, with hundreds of flights cancelled, port calls declined and cargo volumes reduced,” the country’s top export official, in a letter sent by Philexport to its members on Friday, March 13, 2020.
He noted that ports in other countries such as Australia and Singapore are likewise conducting floating quarantined zones, refusing to allow ships that have called at Chinese ports to enter their own ports until the crew has been declared virus-free.
Global shipping companies such as Maersk, MSC Mediterranean Shipping, Hapag-Lloyd and CMA-CGM have reportedly reduced the number of vessels on routes connecting China and Hong Kong with India, Canada, the United States (US) and West Africa.
Global trade has tremendously declined in the process, as factories particularly in China, the epicenter of the pandemic, stopped or slowed down operations while some provinces and countries are locked down.
Ortiz-Luis said the crisis is hurting the country’s major trading partners such as China, South Korea, Germany, the US, Japan and Singapore.
A Philexport survey released on March 9 showed exporters are concerned about the negative impact of the virus.
“Majority of the respondents are mostly concerned about the weakening global demand. On the other hand, logistics, market supply, financing, and overall sustainability are seen as moderate issues,” Ortiz-Luis said.
To mitigate losses, several Philexport members are employing ship-to-ship transfers and rerouting to reach their buyers.
Majority of the respondents are turning to the domestic market as an option.
The Philexport official called on the government to help businesses especially the small ones to keep afloat through collateral-free loans, moratorium on loan and interest payments and tax breaks.
Facilitation of whatever transactions are still possible will also help mitigate mounting business losses, he said.
“Assistance to displaced workers will be another welcome government intervention, with funds possibly coming from their local governments. Finally, it will be relevant and useful to divert or allot new funds to augment equipment, tools, medical personnel and facilities to support the response, recovery and rehabilitation phases of this crisis,” Ortiz-Luis said.