Services trade is expected to be the new driver of global trade growing further in the coming years with the adoption of new technologies and rising incomes, among others. To some extent, the Philippines has already gained a foothold having achieved significant success in the business process outsourcing sector. Moreover, there are new opportunities particularly in digital trade, the creative industries, and, possibly, telemigration. Recently however, Philippine services exports have been growing at a pace much slower compared to past performance and also lower than global and regional trends. In terms of accessing foreign services, the supply of services through commercial presence in the Philippines is still limited as the foreign direct investment (FDI) regime of the country remains highly restrictive. With increasing deficit in the use of licensing fees, it is possible that nonequity-based activities are substituting for FDI and Mode 3 supply. Further disaggregation of trade data and the compilation of Foreign Affiliates Trade Statistics for the Philippines, together with firm and industry level analysis, will be useful in examining the components of services trade and evolving trends and patterns in specific subsectors.
Performance of Philippine Services Trade: An Update
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