Philippine exports rebounded in May from a fall a year earlier, with new growth drivers led by minerals, manufactured goods, agricultural and forest products, making up for the slack in traditional leading sectors electronics, chemicals, and woodcraft and furniture, official data shows.
Government planners see positive prospects for the rest of the year, indicated by the reversal this month of the contraction in manufactured product exports a year earlier in line with a pick-up in global manufacturing activity.
Total export earnings in May rose by 6.9 percent to $5.483 billion from $5.131 billion in the corresponding period last year, as shown by figures released by the National Economic and Development Authority (NEDA) and the Philippine Statistics Authority (PSA) on Thursday. Export growth in May 2013 stood at minus 0.8 percent.
Month-on-month, receipts from May 2014 exports rose 20.7 percent from $4.544 billion recorded in April.
In the five-month period to May this year, total merchandise exports registered a 5.8 percent increase to $24.365 billion from $23.025 billion in same period of 2013.
Seven of the top 10 commodity groups recorded growth for the month. Coconut oil; other mineral products; other manufactures; metal components; machinery and transport equipment; ignition wiring sets and other wiring sets used in vehicles, aircrafts and ships; and articles of apparel and clothing accessories.
Although electronic products remained as the country’s top export group, with total receipts of $2.048 billion and accounting for 37.3 percent of the total exports revenue in the month, receipts dropped by 1.6 percent from $2.082 billion registered a year earlier.
“Other manufactures” came in at second with export revenue of $633.14 million, increased by 40.6 percent from $450.35 million in May 2013.
It was followed by other mineral products with earnings amounting to $485.18 million; woodcrafts and furniture with revenue valued at $306.26 million; and machinery and transport equipment with value posted at $255.70 million.
The National Economic and Development Authority (NEDA), the government’s economic planning body, said the 6.9 percent exports growth in May and the overall outlook for the rest of the year continue to be upbeat.
“The positive outturn in the manufactured segment of the export industry during the period, a reversal from the 3.2 percent year-on-year contraction in May 2013, was broadly in line with a stronger global manufacturing activity,” Emmanuel Esguerra, NEDA deputy director-general and currently officer in charge said in a statement.
However, Esguerra said while overall export outlook for the year is positive, sales in total agro-based exports may decline due to the adverse impact of a possibly prolonged dry spell in the coming months. Other contributory factors include negative outturns in shipments of coconut products, he added.
Total agro-based exports picked up pace in May 2014 as revenues increased to $450.9 million during the period from $380.8 million in May 2013. Major contributors to this growth were coconut products, fruits and vegetables, and other agro-based products.
Higher global coco prices
The NEDA official said export revenues from coconut products posted significant growth of 31.1 percent in May 2014 because of higher international prices, even though volume of coconut product shipments actually fell due to the long-term effects of last year’s Super Typhoon Yolanda on major coconut-producing areas and the effect of the coconut scale insect infestation currently affecting coconut farms in several areas of the country.
While still optimistic that export targets for the full year can be met, Esguerra stressed that to attain the Philippine Development Plan Midterm Update FY 2014 target of $69.0 billion, policies should remain supportive of higher exports growth.
“In the short-term, efforts must be intensified to help the areas vulnerable to the adverse impact of a prolonged dry spell. Measures to contain the spread of coconut scale insect must also be stepped up. Moreover, the capacities of exporters to improve product quality and packaging in line with internationally-accepted standards and practices must be enhanced,” said Esguerra.
Shift from traditional exports
For his part, University of Asia and the Pacific economist Dr. Victor Abola said the May export results might be signaling a shift from ‘traditional’ export staples like electronics and chemicals to other products. “Note that electronic products actually had negative growth, while mineral products and other manufactured goods are doing well,” the economist explained.
Abola suggested, however, that growth expectations should be moderate. “The 6.9 percent growth in exports in May approximates the rate of export growth of China. But Malaysia’s double-digit gains dwarf it,” Abola pointed out. “I am not optimistic that we can maintain double-digit growth in H2, however, primarily because of the City of Manila’s truck ban, which is wrecking havoc on both importers and exporters and even inter-island logistics.”
Japan top destination
Japan remained the top destination of Philippine exports in April, with the total shipment value of $1.120 billion accounting for 20.4 percent of the country’s overall revenues from merchandise exports.
China accounted for 17.5 percent, and the United States, 13.7 percent. Other top markets for Philippine exports were Hong Kong, Singapore and Thailand.