PH export growth slowest in Oct at 2.9%

MANILA, Philippines – After outperforming China’s merchandise export performance in September, the Philippines’ merchandise exports in October grew at its slowest pace in 6 months, the National Economic and Development Authority (NEDA) reported Wednesday, November 11.

Exports in October grew by 2.9% – the slowest growth registered since the 1.3% year-on-year hike in April, the Philippine Statistics Authority (PSA) said.

In September, NEDA reported that Philippine merchandise exports grew by 15.7%, surpassing China’s 15.3%.

Vietnam led the region with a 12.5% increase in exports; followed by China, 11.6%; Thailand, 4%; the Republic of Korea, 2.3%; and Taiwan, 0.7%.

Negative growth rates were recorded in Singapore, -9.2%; Malaysia, -5.8%; Indonesia, -2.2%; Hong Kong, -1.6%; and Japan, -0.8%.

As such, NEDA chief Arsenio M. Balisacan said that the country must remain vigilant as the October performance of the exports sector generally reflected the softening of the country’s main trading partners.

“Major economies such as Japan, China and the Euro area are facing a myriad of economic difficulties, which could dampen exports growth in the short run,” Balisacan warned.

Growth factors

Manufacturers and total agro-based commodities contributed the highest to October’s merchandise exports’ growth. The growth in these commodities was able to offset the weaker sales of minerals, petroleum, and forest products, NEDA said.

The value of merchandise exports grew to $5.2 billion during the period, from $5 billion a year ago.

Balisacan said that despite the decline in 3 commodity groups, the period’s positive performance puts the country in a relatively better position than our neighbors as the Philippines managed to sustain growth amid weak exports performance of almost half of the trade-oriented Asian economies.

For the first 10 months of 2014, total export revenues reached $51.8 billion, up by 9.2% from $47.4 billion in the same period in 2013.

Outbound sales from manufactured goods registered a 2.7% growth in October alone, reaching $4.3 billion from $4.2 billion in the same period last year.

For the 5^th consecutive month, exports of electronic products grew by 4.5%, at $2.2 billion from $2.1 billion in October 2013, backed by robust sales of semiconductors, consumer electronics, control and instrumentation, medical and industrial instrumentation, telecommunication, communication/radar, and office equipment.

Higher sales of machinery, transport equipment, miscellaneous manufactured articles, iron and steel, furniture and fixtures, and textile yarns and fabrics also contributed to the growth for the period.

Agro-based sectors also posted positive growth at 15.7%, with total sales receipts amounting to $401.4 million from $346.9 million recorded in the same period in 2013.

“This double-digit growth was supported by the favorable export performance of coconut products and other agro-based products,” the NEDA chief said.

Export payments for coconut products rose to $158.9 million from $90.8 million in October 2013.

However, exports of mineral products declined by 7.7% to $343.9 million from $372.5 million in October this year, attributed to lower sales in gold, other mineral products, and iron ore agglomerates, Balisacan said.

The NEDA chief also said that the declining international prices of crude oil affected the country’s earnings from petroleum exports, with a total sales receipt amounting to $54.3 million in October 2014 – lower by 4.4% from $56.8 million recorded in the same period last year.

Similarly, outbound shipment of forest products contracted by 32.5%, from $8 million in October last year to $5.4 million in October 2014.

Top buyers

Japan remained as the top buyer of Philippine products in October 2014, accounting for 21.7% of the country’s total export revenues or $1.12 billion in total sales receipts.

The United States has a 15.1% share or $779.2 million, and China,12.5%.

Domestic firms engaged in exporting activities, meanwhile, maintain a positive outlook for the last quarter of 2014 due to increased consumer spending in the holiday season, abundance of raw materials, and transfer of production activities of some firms from China and Thailand to the Philippines.

“Should these materialize, export performance for the remaining period of the year should at least remain positive despite economic headwinds in other economies,” Balisacan said.

Citing fragile growth prospect for exports, Balisacan urged the private sector and the government to focus on increasing competitiveness and developing new products and new markets. – Rappler.com