July exports plunge 19%

Exports tumbled by 19.4 percent to $2.594 billion in July from $3.219 billion in the same period last year, the sixth consecutive monthly decline, as demand for locally made products continued to remain flat due to the global economic slowdown, the National Statistics Office (NSO) said yesterday.

The government statistics office said the export fall was led by the key electronics and components sector, which declined by a sharp 36.6 percent to only $1.18 billion from $1.864 billion a year earlier.

Electronics and components accounted for 45.6 percent of total exports in July, down from a 53.7-percent share in June.

For the seven-month period, earnings declined by more than 10 percent to $18.582 billion from $20.836 billion in the same period last year.

Merrill Lynch economist Jojo Gonzales forecast exports would contract by at least 12 percent this year with no signs of recovery in global demand for electronics.

Even though July’s export decline was slower than the 24.4-percent drop experienced in the previous month, Gonzales said: "The point is it’s still contracting significantly."

"The trend has been there for some time. For as long as we see contracting exports it’s negative for economic growth," Gonzales said.

The bulk of the country’s exports, particularly electronics, is shipped to the US which is undergoing a major slowdown. Other key export markets for electronics are Japan, the Netherlands and Singapore. With the exception of the Netherlands, both Japan and Singapore are experiencing an economic recession.

Gonzales said based on estimates, the soonest a recovery would occur in the US was year-end "and it takes one or two quarters before it translates to improved exports in countries like the Philippines and the rest of Asia."

Aside from electronics, the other key export which recorded a drop were garments with a combined earnings of $255.39 million, or a 7.8-percent drop from last year’s $277.13 million.

Earnings from ignition wiring sets and other wiring sets for vehicles, aircraft and ships were also down by 22.6 percent to $42.61 million in July from $55 million a year ago.

Rounding up the list of top exports for July were: other manufactured products, $39.49 million; woodcraft and furniture, $46.92 million; metal components, $32.50 million; coconut oil, $30.44 million; cathodes and sections of cathodes, $29 million and petroleum products, $27.80 million.

The US absorbed about 30 percent of total exports in July, amounting to $772.53 million, down 23.8 percent from more than $1 billion in 2000.

Japan followed with a 16.5 percent share valued at $427.56 million or 4.1 percent lower than last year’s $445.91 million.

Other top export markets were: the Netherlands with $184.81 million; Singapore, $183.42 million; Taiwan, $163.60 million; and Thailand, $115.62 million.

As a result of the export decline in July, economists said the economy is unlikely to sustain the strong 3.3 percent growth in the second quarter, which was led by unexpectedly strong performance in the industrial sector and buoyant consumer demand.

The government, however, remains confident of full year growth of 3.3 percent to 3.8 percent in 2001 compared with four percent last year.