THE National Economic and Development Authority acknowledged (NEDA) on Wednesday that weak exports could place a drag on overall gross domestic product (GDP) growth in the second quarter of 2015.
Socioeconomic Planning Secretary Arsenio Balisacan said that merchandise exports took a hit in April and May.
“In the first two months of the second quarter, [we saw]negative exports growth. [But we are hoping for better] June exports figure,” Balisacan told reporters on the sidelines of the National Evaluation Policy Framework joint memorandum circular signing on Wednesday.
Data from the Philippine Statistics Authority (PSA) showed exports in April hit a two-year low, dropping 4.1 percent to $4.376 billion from $4.563 billion a year earlier.
Merchandise exports recorded their lowest level in more than three years in May, falling 17.4 percent to $4.899 billion from $5.932 billion a year earlier.
The PSA will release the export figures for June on August 11.
“We have some challenges because of the exports… Globally, exports have been less robust than what we have expected,” Balisacan, who is also the NEDA director general, said.
In this regard, the NEDA chief said attaining even the lower end of the government’s 7 percent to 8 percent GDP growth target this year remains a challenge.
“[It’s a] big challenge to get the 7 percent but we’ll see,” he said.
Analysts have said that weak Philippine exports reflect the waning global economic activity that could pull down the country’s economic expansion this year.
UK-based investment bank Barclays believes the fall in April and May exports are a downside risk to the bank’s 6.5 percent growth forecast for the Philippines this year.
Banking giant HSBC trimmed its Philippines growth projection to 5.6 percent from 6 percent earlier amid weak global demand and slow government spending.
Standard Chartered Bank also cut its growth forecast for the Philippines to 5.7 percent from 6 percent, noting the persistence of weak external demand may cap an economic rebound.
Balisacan optimistic about the third quarter prospects.
“The second half hopefully will pick up because the third quarter, especially, is a low base. We are not giving up,” he said, noting that there are offsetting factors that could drive growth.
The NEDA chief emphasized that the government expects private consumption to continue driving growth on the back of low inflation, strong remittances, low oil prices, and consumer confidence.
“That can drive consumption growth. And the government spending we hope that it’s really much better in the second quarter. So far, we have to see the June numbers,” he said.