PHILIPPINE merchandise exports dropped for a fifth consecutive month in August, falling by sharp 6.28 percent year-on-year to $5.12 billion on the back of double-digit declines for major commodities.
It was the steepest drop since May’s 17.4 percent contraction and the country’s socioeconomic planning chief warned that exports would likely remain constrained given sluggish global demand.
A year earlier, merchandise exports grew by 10.4 percent to $5.47 billion. The August drop trimmed the year to date tally to $39.34 billion, down 4.4 percent from the same period last year.
The Philippine Statistics Authority on Friday traced the August drop to declines in six of the country’s top ten exports, offsetting gains made by the number one export item, electronic products.
The National Economic and Development Authority (NEDA) said the latest results mirrored global developments such as slower trade, sluggish industrial production and downward pressures on commodity prices.
In a statement, Socioeconomic Planning Secretary Arsenio Balisacan said, “With the absence of fresh triggers to spur renewed demand from major advanced economies, the exports sector is expected to remain constrained in the coming months.”
He said the exports sector would be weighed down by factors such as low oil prices and the ongoing El Nino weather phenomenon.
“Over the medium term, we encourage tapping new markets, diversifying export products, and pursuing innovation in order to secure growth, stability and competitiveness for the export sector,” he said.
“This, however, must be coupled with government’s effort to develop infrastructure, improve business regulations and logistics, and lessen foreign investment restrictions in the country,” Balisacan added.
Sharing the same view with the NEDA chief, BPI associate economist Antonio Mapa said, “The fall in commodities may be owing to both falling output and falling value, as commodity prices have slipped on global growth concerns.”
Nevertheless, “exports may pick-up toward the end of the year as we’ve seen imports showing a replenishment of raw materials used in our mainstay electronics exports,” Mapa added.
The six exports that posted declines in August were other mineral products, down 63.2 percent to $117.30 million; apparel and clothing accessories, -39.3% to $103.02 million; ignition wiring sets and other wiring sets, -37.4 percent to $153.72 million; chemicals, -27.8 percent to $123.56 million; metal components, -10.6 percent to $125.38 million; and other manufactures, which fell 7.9 percent to $343.38 million.
Electronic products, the country’s top export with a 45.9 percent share, increased by 3.3 percent to $2.35 billion. Semiconductors, in particular, grew by 8.6 percent to $1.71 billion.
The other positive performers were machinery and transport equipment, up 41.4 percent to $405.89 million; woodcrafts and furniture, 9.3 percent to $275.70 million; and electronic equipment and parts, which rose 185.7 percent to $268.66 million.
Japan was the Philippines’ top export market in August, accounting for 20 percent of the country’s total outbound shipments or $1.028 billion. However, this was down 1.6 percent from a year ago.
The United States came in second with a 15 percent share or $766.38 million. It was followed by the China, Hong Kong and Singapore.