Philippine exports growth weakened overall in April from a year earlier, with declines in a major sector—the electronics segment—offsetting gains made by other traditionally strong products such as processed food, machinery, clothing accessories and furniture, official data shows.
The slowdown failed analyst expectations, and while optimism for a possible recovery during the second half of the year remains as the economies of the country’s trading partners are expected to gain pace, a local truck ban currently in place is seen curbing the extent of any rebound.
Total export earnings in April posted a slight 0.8 percent net increase to $4.544 billion from $4.506 billion in the same month a year earlier, figures released by the National Economic and Development Authority (NEDA) and the Philippine Statistics Authority (PSA) showed on Tuesday.
Month-on-month, receipts from April exports slid 13 percent from $5.227 billion recorded in March.
Growth came mainly from six of the top 10 commodity groups for the month. These are processed food and beverages; other mineral products; machinery and transport equipment; ignition wiring set and other wiring sets used in vehicles, aircraft and ships; articles of apparel and clothing accessories; and woodcraft and furniture.
Although electronic products remained as the country’s top export group, with total receipts of $1.817 billion and accounting for 40 percent of the total exports revenue in April 2014, receipts dropped by 2.5 percent from $1.863 billion registered in the corresponding month of 2013.
“Other manufactures” posted export revenue of $376.31 million, down 12.2 percent from $428.4 million.
The National Economic and Development Authority (NEDA), the government’s economic planning body, said the slowdown in export growth is not expected to persist in the long term.
“Overall, the gradual recovery of the global economy continues to firm up . . . demand from the Philippines’ other major export markets picked up strongly in April 2014, particularly from Singapore, Hong Kong, Thailand, Germany, Taiwan, and the Netherlands,” Economic Planning Secretary Arsenio Balisacan said.
Balisacan, also the NEDA director general, said the Semiconductors and Electronics Industries of the Philippines remains optimistic that the country’s semiconductor exports will bounce back before the end of the year to maintain the sector’s 2014 growth target at 5 percent.
Japan remained the top destination of Philippine exports in April, with the total shipment value of $939.16 billion accounting for 20.7 percent of the country’s overall revenues from merchandise exports.
The United States accounted for 16.2 percent, and China, 12.6 percent.
Other top markets for Philippine exports were Singapore, Hong Kong and Germany.
Nicholas Antonio Mapa, Bank of the Philippines associate economist, noted that electronics exports slowed for a third straight month in April. Some non-electronics exports also declined during the month, indicating that the gains in the previous year were most likely a result of one-time demand and may not be sustainable, he said.
However, Mapa sees exports possibly bouncing back in the second half of the year when the economies of the country’s top trading partners such as the US, Japan and the Eurozone are expected to improve.
Victor Abola, economist at the University of Asia and Pacific, said the pace of growth is disappointing as more outbound shipments may be limited by a restrictive truck ban implemented by the City of Manila.
“This has slowed down releases [of cargoes]from the port of Manila, both inward and outbound. This is a very serious problem because it means that there will be more and more ships that can’t load/unload cargo for raw materials or exports,” Abola added.