Philippine merchandise exports fell for a sixth straight month in September, the steepest in four years and mirroring a continued weakness in global economic activity.
At $4.4 billion, the result was down 27.7 percent from September last year, the Philippine Statistics Authority reported on Tuesday. Eight of the top 10 exports and all but one of the top 10 markets recorded declines.
The drop was the sharpest since September 2011’s 27-percent contraction, which was due to a regional supply chain disruption that cut into demand for electronics, the country’s top export.
Socioeconomic Planning Secretary Arsenio Balisacan held out the hope of a fourth quarter recovery and the possibility that services exports would take up the slack. He warned, however, that Philippines needed to diversify its markets.
“[The September result] mirrors a still sluggish external demand due to weak global economic activity and depressed commodity prices, which continue to strain exports growth. Nonetheless, signs of a possible rebound of the country’s merchandise exports in the fourth quarter are likely, owing to better prospects in Japan, US and the eurozone,” Balisacan said.
Year to date, merchandise exports were down 6.9 percent to $46.97 billion.
For September, contractions were seen in eight major commodities: chemicals (85.5 percent to $87.06 million), other mineral products (72.8 percent to $72.34 million), other manufactures (66.1 percent to $176.56 million), metal components (55.8 percent to $61.24 million), apparel and clothing accessories (45.5 percent to $83.97 million), coconut oil (38.4 percent to $93.11 million), ignition wiring and other wiring sets (2.7 percent to $156.29 million) and electronic products (2.1 to $2.393 billion).
The only gainers were machinery and transport equipment and woodcrafts and furniture, which rose by 11.1 percent (to $354.72 million) and 22 percent (to $247.19 million), respectively.
Viewed another way, manufactured goods—which accounted for 86.5 percent of total commodity exports—declined by 23.6 to $3.8 billion.
“This reflects the still weak global manufacturing sector, which can be traced to the sluggish final demand and ongoing inventory adjustments,” Balisacan said.
Nine of the country’s top 10 markets, which accounted for $3.67 billion of total exports, registered declines for the month.
Japan remained the top destination of Philippine-made goods at $905.84 million but this was down 47.7 percent from last year.
The United States was second at $638.14 million, down 19.4 percent, followed by Hong Kong, which was the only market that posted an increase—13.4 percent to $610.15 million.
China was fourth at $435.4 million, down 28.9 percent from last year.
Rounding out the top ten markets were Germany ($201.94 million, down 16.3 percent), South Korea ($191.32 million, down 14.3 percent), Taiwan ($170.33 million, down 5.7 percent), Thailand ($119.12 million, down 34.5 percent) and the Netherlands ($114.75 million, down 32.7 percent).
More than half of September’s merchandise exports went to countries in East Asia, which accounted for a 52.7 percent share or $2.32 billion, 29.5 percent lower compared to last year.
“The government needs to further strengthen its efforts to diversify export markets in order to dissipate the impact of weak demand from a relatively concentrated market.
Tapping the opportunities from the export of services such as outsourcing can in part compensate for the decline in goods exports,” Balisacan said.
He added that maximizing the potential of free trade agreements should be explored along with programs directed at bottlenecks affecting the export sector’s competitiveness.
“We need to explore the country’s inclusion in the Trans Pacific Partnership agreement, which can bring enormous benefits to participating countries in terms of trade,” said Balisacan, noting that Vietnam has seen continuous growth in exports is due to its ability to take advantage of trade opportunities.