Weaker demand for manufactured goods and lower sales of petroleum pulled down total Philippine exports by 0.5 percent year-on-year in January, the government reported on Tuesday.
Data from the Philippine Statistics Authority showed the value of January exports dropped to $4.357 billion from $4.379 billion a year earlier, with five major commodities such as woodcraft and furniture, chemicals, metal components, coconut oil, and other manufactures registering a slowdown during the month.
The National Economic and Development Authority (NEDA) said the decline was negligible compared with the fall in other Asian economies. The agency also pointed out a 34 percent surge in the exports of mineral products and a 12.9-percent rise in the exports of agro-based products.
“The decline is negligible, compared to most trade-oriented economies in selected East Asian countries, which posted negative outturns in merchandise exports during the period,” NEDA director-general Arsenio Balisacan said in a statement.
Balisacan, who is also Economic Planning Secretary, stressed that the January exports performance of the country was in line with the weaker demand conditions and fragile manufacturing sectors in some of the Philippines’ major trading partners such as Japan, Korea and Singapore.
The NEDA noted that among major commodity groups, higher shipments of copper metal, copper concentrates, and iron ore agglomerates pushed mineral products to grow to $201.0 million in January 2015 from $150.0 million in the same month last year.
Export earnings from agro-based products rose to $313.9 million in January 2015 from $278.2 million in January 2014, because of the increased outward shipment of sugar, coconut products and other agro-based products.
However, exports of manufactured goods fell by 1.6 percent to $3.7 billion from $3.8 billion in January 2014, mainly because of the lower outbound sales of other manufactured goods, wood manufactures, electronic equipment and parts and chemicals.
Electronics top export
Despite the slowdown, electronics remained the country’s top export product in January, accounting for 46.8 percent of total exports for the month, with export earnings rising 14.6 percent to $2.040 billion from $1.780 billion in January 2014.
NEDA attributed the increase in electronic products to the 16-percent jump in the outbound shipment of semiconductors, which accounted for almost 69.0 percent of the country’s total electronic exports.
Meanwhile, the agency said export receipts from petroleum products remain affected by the continued decline in global crude oil prices.
Earnings from petroleum products accounted for a 0.3 percent share of the total export revenue, reflecting an 82.2 percent drop year-on-year.
“While the gains in mineral and total agro-based products were not enough to compensate for the lower overseas sales of manufactures and petroleum products, their strong performance for the period helped moderate the decline in our total merchandise exports,” Balisacan said.
The NEDA chief said that the slack performance for the period remains in line with the anticipated low demand due to seasonal factors.
NEDA warns of risks
Balisacan warned of risks along the fringes of a relatively healthy Philippine exports sector.
“While the Japanese and Chinese manufacturing sectors slightly recovered in February, recent developments in the US manufacturing sector may further strain exports over the short-run,” he said.
The NEDA director general said the composite index for the US manufacturing sector suggests a moderation in the next period, reflecting the downward trend in new orders and employment in the sector.
“Based on general market consensus, commodity prices will also likely remain low for all of 2015. On that note, revenue from major agro-based commodities such as coconut oil and copra may moderate given the stabilization of global supply,” he said.
However, he pointed out that increasing demand for gadgets and smart technologies will continue to benefit the electronics sector.
Balisacan urged the government to fast-track programs intended to support the industrial and manufacturing development of the country.
The full implementation of the Industry Development Program of the Department of Trade and Industry, which aims to enhance the competitiveness of key industries, should be supported, he said.
“To complement this, gaps in infrastructure, including in energy and logistics, should also be addressed in order to enhance the competitiveness of Philippine exports,” he added.
Japan remained the country’s top export market for the month, with a 20.3 percent share of total exports amounting to $882.6 million. This was, however, lower by 23.2 percent year-on-year.
The United States came in second with a 15.9 percent share, amounting to $693.9 million.