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PH exports fall in April, lowest in 2 years

CONTRACTION. Exports rebounded in March to 2.1%, but the contraction in April marks the lowest since the 5.8% contraction in February 2013.

CONTRACTION. Exports rebounded in March to 2.1%, but the contraction in April marks the lowest since the 5.8% contraction in February 2013.

MANILA, Philippines – The Philippines failed to sustain its modest export rebound in March, as exports growth fell by 4.1% in April this year, the National Economic and Development Authority (NEDA) reported Wednesday, June 10.

Exports rebounded in March to 2.1%, but the contraction in April marked the lowest since the 5.8% contraction in February 2013.

From January to April 2015, exports fell by 1.2% ($18.62 million).

The decline in exports, along with weak public spending, was one of the root problems of the gross domestic product growth slowdown last quarter.

Total value of outward shipments fell to $4.4 billion in April 2015 from $4.6 billion in the same period last year, the Philippine Statistics Authority (PSA) reported.

'Fragile global economic conditions'

Economic Planning Secretary Arsenio M. Balisacan said the decline "is partly reflective of fragile global economic conditions, as most trade-oriented economies in East and Southeast Asia also registered negative export performance in April 2015."

“Only Vietnam [is] in positive territory. Weaker demand conditions in some of our major trading partners, particularly China, were seen,” Balisacan said.

Outbound shipment of petroleum products worth $2.7 million in April 2015 – a 94.8% decline from the $52 million recorded in April 2014.

Falling crude oil prices in the global market continue to partly affect the country’s exports, evident in the year-on-year declines in the volume of petroleum exports to Singapore, Malaysia, Thailand, and Cambodia, NEDA noted.

Similarly, exports of mineral products decreased by 18.2% in April 2015 to $260.3 million from $318 million in April 2014, due to lower earnings from copper concentrates and iron ore agglomerates.

Total exports revenue from agro-based products also dropped by 33.1% to $231 million in April 2015 from $345 million in April 2014, citing sharp contractions recorded in fruits and vegetables.

Other manufactures also fell 26.7%; machinery and transport equipment by down 4.4%; woodcrafts and furniture dropped 23.9%; and apparel and clothing accessories sluggish at 4.9%.

Electronics and semiconductors (comprising 50.6% of total exports in April), rose to an annual growth of 17.8% in the same period, the fastest rise in 5 months. The Philippines provides about 10% of the global demand for semiconductor manufacturing services, including for mobile phone chips and microprocessors.

Impact

Infographics from the National Economic and Development Authority

Balisacan warned that the production of agro-based commodities will continue to feel the impact of prolonged drought, along with the occurrence of stronger and erratic typhoons.

“This will ultimately affect production,” he said.

Fast-tracking and strengthening initiatives like infrastructure support, hybrid seeds, and advanced weather sensing facilities to lessen the impact of extreme weather conditions on agriculture, if undertaken, will help stabilize supply of exported agro-based commodities and provide steady income for workers in agriculture, Balisacan said.

Overall, the country’s export sector remains vulnerable to declining demand from major trading partners.

The softening of economic activity in China as well as the still fragile economic growth of Japan remains a downside risk for the Philippine export sector.

Philippine exports to top market Japan, fell by 16.1%. Shipments to the US were down 5.4%. Exports to China declined 17.9%.

Balisacan said to counter such weak demand, the government should maximize existing trade agreements, especially with emerging economies benefitting from the low oil price environment. – Rappler.com

Exports concept image via Shutterstock