File photo by AFP
MANILA, Philippines – The National Economic and Development Authority (NEDA) said the country's export firms may need to change their strategy as exports fell for the 14th straight month.
Data from the Philippine Statistics Authority (PSA) on Tuesday, July 12, showed that exports declined by 3.8% year-on-year in May 2016 to $4.7 billion as exports of all commodity groups decreased.
Exports of agri-based products fell by 29.4%, mineral products by 13.6%, manufactured products by 0.5%, forest products by 82.6%, and petroleum products by 33.4%.
In terms of export markets, Japan remained on top in May with 22.1%. Exports to Japan grew by 1.5% for the month while averaging 1.3% for the first 5 months of 2016.
NEDA said a weak global environment contributed to the prolonged slowdown, noting that among 7 select Asian economies, only Vietnam posted positive export growth in May.
The government agency pointed out, however, that the Philippines' decline in May was an improvement over the 15.1% decline in March.
"The growth of exports is expected to remain muted for the rest of 2016 with the slow recovery of the global economy," NEDA Director-General Ernesto Pernia said.
Pernia added that "given the soft demand, export-oriented firms may need to refocus their strategies to consider non-traditional markets, which have shown healthier appetites in recent months."
He cited, for instance, the growth of exports to European countries. Exports to France and Switzerland grew by 37.8% and 72%, respectively, for the first 5 months of the year.
This was in stark contrast to exports to traditional markets such as Germany and the Netherlands, which declined by 18.8% and 10.6%, respectively.
"It would also be important to increase the flexibility of export firms to cater to the domestic market, given robust domestic demand," Pernia said.
"We also need to keep government spending on track to ensure that domestic demand continues to provide a cushion to mitigate the impact of the country's weak exports growth," he added. – Rappler.com