PH exports continue decline in November

MANILA, Philippines – Overall merchandise exports posted a slight decline in November, the National Economic and Development Authority (NEDA) reported Tuesday, January 12.

Exports fell slightly to $5.1 billion in November 2015 from $5.2 billion in the same month of 2014 amid the weak global economy, the Philippine Statistics Authority (PSA) reported Tuesday.

The Philippines recorded though the least export decline among the monitored economies in East and Southeast Asia for November 2015.

Except for Vietnam, most economies in the region posted lower merchandise exports, NEDA reported.

On the brighter side, Philippine exports of electronics products showed signs of recovery in November 2015 and this contributed to a slower decline versus the 10.8% fall in October last year, NEDA noted. (READ: PH exports down again in October)

The country’s positive performance in the sales of semiconductors bucked the international trend as worldwide sales were down in November 2015, Economic Planning Secretary Arsenio M. Balisacan said.

“Thus, the modest growth in exports of goods from the electronics and semiconductors segment is expected to continue propping up total merchandise exports,” he said.

Very challenging

Meeting the country’s export targets has been very challenging as the global economy remains weak, which translates into weak demand for the country’s export products, Balisacan said.

“Given the performance of the export sector in the first 11 months of 2015, the full-year target is unlikely to have been met,” he said.

Balisacan added that in order to achieve the full-year target for 2015, merchandise exports in December 2015 would have to register a total of $11 billion, equivalent to a growth of 129%.

Although a slight uptick is anticipated in 2016 for exports, risks are skewed toward the downside as a more protracted slowdown across emerging economies could have substantial spillovers to other developing economies, and eventually hold back recovery in advanced economies, he added.

Continuous decline

From January to November 2015, total exports value fell by 5.8% or $54 billion from $57.3 billion in the previous year.

Merchandise exports for the said period account for only 83.1% of the government’s merchandise export target of $65 billion for 2015.

But the Nikkei Japan Manufacturing Purchasing Managers’ Index (PMI) output growth accelerated to a 20-month high in November, signaling solid growth in the Philippines’ top export market.

“Both production and new orders increased at marked rates, with the former expanding at the fastest rate since March 2014,” the Cabinet official said.

All key commodities registered double-digit declines except for manufactured goods, which posted a 3.6% year-on-year increase as shipment of electronic products continued to recover for the same period.

Total export receipts from agro-based products were down by 23.1% to $240.6 million in November 2015 on account of lower revenues, recorded mostly from fruits and vegetables, as well as fish, unmanufactured tobacco, natural rubber, among others.

The total value of outward shipment of mineral products also decreased by 25.3% or $151.8 million in November 2015 due to lower earnings from copper metal and iron ore agglomerates.

Exports receipt from petroleum and forest products plunged by 69.3% and 79.5% respectively in the said period.

Diversify, diversify

Overall, Balisacan said the country needs to diversify the products and export markets to mitigate the drag in exports performance.

In light of regional economic integration, the country should also take full advantage of other export markets other than our traditional export destinations, he added.

“Moving forward, the government needs to continue to strengthen efforts to improve competitiveness of our local industries as the other ASEAN (Association of Southeast Asian Nations) member states continue to improve theirs,” he added.

Balisacan said a well-organized and coordinated mechanism that can provide negotiating experience, policy research, and analytical preparation support, as well as physical and financial resources, will also need to be institutionalized. – Rappler.com

Electronics image from Shutterstock