Slowdown in electronics sales puts exports back in red

MANILA, Philippines [UPDATED] – Just when analysts thought they were well on their way to recovery after almost a year of contraction, exports returned to negative territory in March due to the slowdown in electronics shipments.

Data from the National Statistics Office showed exports fell 1.2% to $4.302 billion in March from $4.356 billion in the same month last year.

The decline in exports bucked the trend seen at the start of the year. Exports grew 3% in January and by a revised 12.8% in February, prompting analysts to say they were already bouncing back. Exports suffered declines from May to December 2011, dropping by as much as 27%.

With March’s contraction weighing on average growth, exports totaled $12.856 billion in the first quarter of 2012, up 4.6% year-on-year, following a two-month growth of 8.8%.

Forecasts

Previously, two analysts predicted that exports would grow in March.

BusinessWorld reported that Singapore-based DBS Bank and UK-based Barclays estimated exports growth of 9.1% and 17%, respectively, for March.

Both cited recovering global demand, particularly for electronics, the Philippines’ main export item.

Shipments of electronics, which made up bulk of exports with a 52.6% share, grew by a measly 1.1% to $2.263 billion in March, a drastic slowdown from the 15.8% growth in February.

Compared to February’s electronics receipt of $2.334 billion, March’s was down 3.1%.

Meanwhile, semiconductors, which comprised 38.9% of total electronics exports, earned $1.672 billion in March, down 3% from the previous month.

While many analysts are positive about a recovery this year, some are cautious given the financial problems of some of the Philippines’ major trading partners.

Economic recovery in the US remains weak, while countries in Europe are implementing austerity measures, affecting demand for Philippine exports.

US is top market

However in March, demand from US, the country’s top export market, remained positive, while that from Asian partners Japan and Singapore fell.

The US accounted for 15.5% or $668.25 million of total receipts, 9.6% higher than last year’s $609.93 million.

Japan, the second biggest market, accounted for $664.78 million of exports, down 12.6% from $760.73 million last year.

China came in third with $642.07 million, up 27.8% year-on-year, followed by Singapore with $410.35 million, down 0.5%. – Rappler.com