September exports drop for 1st time in 6 years

Export earnings for September fell for the first time in nearly six years, dragged down by a sharp drop in shipments of locally made electronics and components, the National Statistics Office (NSO) reported yesterday.

Shipments declined 5.2 percent to $3.502 billion from $3.693 billion in the same period last year.

While export growth has been weakening in recent months, the government statistics office said this is the first actual decline in exports since November 1994.

Economists expressed fears that an extended period of weak exports will lower growth in an already faltering economy.

But while growth in electronics exports has been declining in recent months, analysts attributed much of September’s drop to unusually high exports late last year caused by Taiwanese companies shifting production to the Philippines after a severe earthquake in Taiwan.

For the nine-month period, exports went up by nine percent to $27.867 billion from $25.558 billion last year.

Shipments of electronics and components which accounted for nearly 62 percent of total receipt tumbled by 15 percent to $2.163 billion in September from $2.543 billion in the same period last year.

Exports of clothing accessories, the second top earner, raked in $233.83 million, up 12.8 percent from $207.34 million a year ago.

Earnings from wiring sets and other wirings went up by 15.3 percent to $52.44 million from $45.48 million last year while earnings from woodcraft and furniture worth $47.17 million went up by nearly 13 percent from $41.83 million a year ago.

Other top exports were: Petroleum products, $39.46 million; other manufactured materials, $38.36 million; coconut oil, $36.58 million; metal components, $23.31 million; bananas, $16.35 million; and shrimps and prawns, $15.85 million.

Orion Squire Capital Inc. research head Hazel Flores said September’s export performance was "alarming" as it signals a slowdown in the economy.

Other economists believe another quarter of weak exports will make it highly likely that the government will miss its four percent to five percent economic growth target for the year as growth is heavily depended on the export sector.

Indeed, many believe the target is already beyond the government’s grasp, with Barclays Capital predicting growth of 3.5 percent in 2000 and 2.75 percent in 2001.

Weakening global demand for computers and computer-related parts and products is expected to have a major impact on countries exporting these products, such as the Philippines, Taiwan, South Korea and Malaysia.

"We don’t expect electronics exports to recover because of this trend, " said Abacus Securities Corp. economist Jun Neri.

Indeed, the medium-term outlook for local exports isn’t bright. Although the weak peso should buoy revenues in the coming months, the impact of higher oil prices, the weak euro making Asian products more expensive in Europe, Japan’s shaky recovery and the specter of a global downturn in demand for electronics will likely dampen export growth. – with AP report