Improving from a 17.4% slump in May
PHILIPPINE exports fell for the third consecutive month in June but at a much slower pace of 3.3 percent compared with a 17.4 percent slide in May, with higher sales of manufactured goods tempering the decline, the Philippine Statistics Authority (PSA) said on Tuesday.
The fall in June exports, however, reversed the 21.6 percent increase posted in June 2014. This compares with the reversal in May of a 15.6 percent exports rise from a year earlier.
Six major commodities accounted for the fall in June, with other mineral products posting double-digit declines, figures from the PSA show.
Exports during the sixth month of the year fell to $5.281 billion from $5.462 billion a year earlier, mainly driven by decreases in other mineral products (-38.2 percent); articles of apparel and clothing accessories (-29.5 percent); chemicals (-17 percent); machinery and transport equipment (-5.8 percent); ignition wiring set and other wiring sets used in vehicles, aircraft and ships (-5.2 percent) and other manufactures (-1.6 percent).
Cumulative exports for the first half of 2015 totaled $28.804 billion, down 4.7 percent from $30.233 billion registered in the year-earlier period.
Persistent weakness in external demand
The National Economic and Development Authority (NEDA) traced the fall in June exports to persisting weak external demand.
The “year-to-date outcome, in terms of both value and volume, suggests fragility in demand, particularly in major trading partners,” Socioeconomic Planning Secretary Arsenio Balisacan said.
The drop in exports reflects a still fragile global economy, which is felt across the region, Balisacan, who is also the NEDA director general, pointed out.
“Most of the major economies in East and Southeast Asia also registered negative export performance in June 2015, with only Vietnam and PR (People’s Republic of) China in positive territory,” he said.
On a positive note, the NEDA chief stressed that the 3.4 percent increase in sales of exported manufactured goods, particularly electronics, and petroleum tempered the overall decline during the month.
The electronics sector gained momentum as exports of electronic products rose by 9.5 percent, buoyed by semiconductors, which posted a 16.9 percent rise. This is a strong reversal of the year-on-year reduction of 7.5 percent in May.
“The country’s relatively strong semiconductor exports emulated the progress in the global semiconductors market as worldwide sales continued to expand for the 26th consecutive month, as reported by the Semiconductors Industry Association,” Balisacan said.
NEDA sees benefit from US recovery
The NEDA chief remains hopeful that economic recovery in the United States would add momentum to Philippine exports growth, particularly in consumer goods, given the strong employment figures in the sector.
“In addition to domestic policies that support exports growth, such as product innovations, improvements in bureaucratic procedures and industrial infrastructure, both the government and the private sector should intensify programs to diversify export products,” he said.
Balisacan also emphasized the need for tapping opportunities in the Association of Southeast Asian Nations bloc and exploring trade opportunities in other emerging markets to take advantage of their growing consumer base.
“While these options require more time to be realized, propping up domestic demand should be supported to counter external imbalances. The government should fast-track projects intended to make the business climate more conducive for investments and employment generation, as well as policies designed to increase the purchasing power of consumers,” he said.
Japan remained the Philippines’ top export market in June, accounting for a 23.4 percent share of the total, or $1.234 billion. The value of exports to Japan reflects a 29 percent expansion from the year-ago level.
The US came in second, with a 13.6 percent share, or $720 million. It was followed by China, Hong Kong and South Korea.