Philippine exports fell for the third consecutive month despite the recovery of the electronics sector in June 2015, according to the National Economic and Development Authority (NEDA).
Weak external demand continues to affect the country’s external trade performance, particularly for the merchandise exports sector. Year-to-date outcome, in terms of both value and volume, suggests fragility in the demand, particularly in major trading partners, said Economic Planning Secretary Arsenio M. Balisacan.
The Philippine Statistics Authority reported Tuesday that the country’s merchandise exports declined by 3.3 percent in June 2015 from the same period last year on account of lower revenues from total agro-based and mineral products. The value of exports in June 2015 dropped from USD5.5 billion last year to US$ 5.3 billion.
This decline reflects a still fragile global economy that is felt across the region. Most of the major economies in East and Southeast Asia also registered negative export performance in June 2015, with only Vietnam and PR (People’s Republic) China in the positive territory, said Balisacan.
On a positive note, the country’s higher sales of exported manufactured goods (3.4%), particularly electronics, and petroleum tempered the exports decline during the month. The electronics sector gained momentum as exports of electronic products rose by 9.5 percent during the month, buoyed by semiconductors (16.9%). This is a strong reversal from the year-on-year reduction of 7.5 percent last month.
The country’s relatively strong semiconductor exports emulated the progress in the global semiconductors market as worldwide sales continued to expand at its 26th consecutive month, as reported by Semiconductors Industry Association, the Cabinet official said.
Meanwhile, revenues from the country’s agricultural exports continued to fall in June 2015, marking its fifth consecutive month of double-digit decline for the year. The value of outward shipments of agro-based products fell by 24.9 percent on account of lower revenues from fruits and vegetables, sugar and coconut products and other agro products.
Similarly, exports of mineral products decreased by 26.2 percent in June 2015 due to lower earnings from copper metal and other mineral products. Also, mineral product exports to the country’s top markets posted steep declines in June 2015, particularly China, Switzerland and Thailand.
In addition to the frail demand from major economies, the country’s recent external trade performance is also partly due to an abundant supply of industrial commodities, thus revenues from mineral and agro-based exports are seen to continue to decline in the short-term due to falling prices, said Balisacan, who is also NEDA Director-General.
Nonetheless, he remains hopeful as positive economic developments in the United States are expected to add momentum to exports growth particularly in consumer goods, given strong employment figures.
In addition to domestic policies that support exports growth such as product innovations, improvements in bureaucratic procedures and industrial infrastructure, both the government and the private sector should intensify programs to diversify export products, said Balisacan.
In addition to exports diversification, he also emphasized on tapping opportunities in the ASEAN bloc and exploring trade opportunities in other emerging markets to take advantage of their increasing consumer base.
While these options require more time to be realized, propping up domestic demand should be supported to counter external imbalances. The government should fast track projects intended to make the business climate more conducive for investments and employment generation, as well as policies designed to increase the purchasing power of consumers, he said. (PNA)