Despite the temporary drop in the trading volume due to COVID-19, the Philippines has quickly recovered. Continuing its solid macroeconomic expansion, the country’s total external trade in goods amounted to US$19.35 billion in 2022, according to figures by the Philippine Statistics Authority. While the figures traditionally show a trade deficit, the value of exported products in January 2022 increased at an annual rate of 8.9%, up from 7.3% in the previous month.
The following statistics show a healthy environment for import and export business and local entrepreneurs. The country’s rapid economic growth offers new exporters a thriving market for goods from electronics to coconut oil. Moreover, the existing Free Trade Agreements (FTAs) in the Philippines make it an attractive regional trading hub. Here’s an essential guide on how to export for new entrepreneurs:
Before entering the export business, every entrepreneur should become acquainted with the different variations of export businesses. Here are the most common forms present in the Philippines:
Export Management Company (EMC) – Such a company partners with local businesses to sell their products overseas. Usually, EMCs don’t have the technical know-how or the resources to carry out the in-house tasks. That’s why they focus primarily on handling the export operations.
Export Trading Company (ETC) – As the name suggests, Support Trading Companies (ETCs) specialize in providing support services to exporting businesses. Typically, they assist in various aspects, including shipping, warehousing, and handling any legal requirements underlying during the process.
Import/Export Merchant – The nature of this business is similar to freelancing and involves purchasing goods from a domestic or foreign manufacturer. Then, the freelance agent packs, ships, and resells the product overseas.
Another essential point to consider is the export destination. In 2021, the top trading partners of the Philippines, according to an analysis by World’s Top Exports, were:
United States (US$11.9 billion)
China (US$11.5 billion)
Japan (US$10.7 billion)
Hong Kong (US$9.9 billion)
Singapore (US$4.2 billion)
The Highlights of the Philippine Export and Import Statistics for March 2022 show that the most exports go to countries from the Asia-Pacific Economic Cooperation (APEC). Of course, emerging markets like Europe and the Middle East may offer potential opportunities as well. Understanding the best trading destinations is often a viable metric for exporting overseas, as these markets tend to be accustomed to working with Filipino businesses, making it easier for businesses to start exporting there. It also allows Filipino businesses to localize their products and plan the best ways for businesses to penetrate these markets.
A critical step in understanding an export business is devising a working business plan. Typically, it may include the specific idea, product, or service to be outsourced. Moreover, it must also have some estimations like the startup costs, income, billing, and a budget and income forecast. Researching the target market is also crucial – businesses can better understand the preferences and pain points of their target customers, and in turn, develop products and solutions that cater to their specific needs.
Businesses exporting out of the Philippines must go through a one-time registration procedure. New entrepreneurs should enlist their interaction with the Department of Trade and Industry (DTI) and register for export with the Client Profile Registration System (CPRS). The latter accreditation is renewable annually to ensure all companies comply with the rules and regulations.
It’s important to note that some exporters must undergo additional registration under certain conditions. For example, businesses looking to export to the special economic zones (SEZ) are required to check with the Philippine Economic Zone Authority (PEZA). Similar rules apply to companies operating out of free port zones. The country also has a list of restricted and prohibited imports and exports, which require special authorization.
Here’s a complete list of the documents needed before commencing exportation:
packing list with a description of all products;
Bill of Lading;
Customs Export Declaration;
Certificate of Origin.
In the Philippines, the equivalent of an “Export 101” guide is the Philippine Export Guidebook. This book helps exporters, especially Micro-, Small and Medium-sized Enterprises (MSMEs), by providing a clear understanding of the export process in the Philippines.
One of the most crucial but often overlooked decisions for exporters is to partner with a trustworthy logistics service provider. This is often the prerequisite SMEs need to reap the advantages of exporting. In this regard, DHL Express offers an excellent opportunity for new businesses to expand their global reach by providing high-quality on-demand delivery services that set businesses apart from competitors.
Even though the Philippines traditionally has a deficit import vs export volume, the export sector has been continuously growing. Now, more small and medium enterprises can benefit from healthy market conditions and exporting. However, they often need a partner to help them go the extra mile for their customers.
With DHL Express, every business can take their export processes to the next level using the most advanced technologies. Features like Paperless Clearance and DHL Shipping Tools allow small companies to confidently leverage digital innovations and automation. You, too, can start exporting easily by signing up for an account with us.