August exports still up, but growth slows

The Philippines posted a fifth consecutive month of double-digit export growth in August, but analysts said yesterday the momentum may be slowing after hitting a peak in July.

Analysts said they expected year-on-year export growth to deteriorate further in coming months, given worries about the US economy.

The National Statistics Office (NSO) said the country recorded merchandise export revenues of $2.99 billion in August, up 14.1 percent from $2.621 billion a year ago.

But the August exports were lower than July exports of $3.19 billion, the first decline on the month for August since 1995, Jose Vistan, an economic analyst at AB Capital said.

July exports were 23 percent higher than a year ago.

"I had expected it to slow down a little bit but at least the trend (upward year-on-year) is still there," said Luz Lorenzo, economist at ATR Kim Eng Securities.

"It tells me we are on track to achieve my forecast for around 15-16 percent full year growth for 2002."

But Lorenzo said she believed that the July year-on-year growth in exports maybe the highest for the year.

In the first eight months of the year, exports rose 7.8 percent to $22.849 billion from $21.203 billion a year earlier, the NSO said.

Momentum slowing

Vistan said the month-on-month slowdown was a concern.

"This is the first time that we had a month-on-month decline for August since 1995. Normally, August is a busier month than July. This could mean a slowdown in momentum in exports growth. Maybe, the global slowdown is starting to affect our exports," Vistan said.

The United States is the Philippines’ main trading partner, buying 25 percent of total export revenues in the first eight months. The country’s exports are mainly electronic goods.

In August, receipts from electronic components, accounting for 51.6 percent of export revenue, rose 17.7 percent from a year ago to $1.544 billion, the NSO data showed.

A local bank economist said he expected average year-on-year export growth of around five to seven percent each month from September to December.

"Exports normally trend lower in the fourth quarter. By the last quarter, most requirements (orders) are already filled up," the bank economist, who asked not to be identified, said.

"The electronics sector has been exhibiting surprisingly strong growth, led by microchips. But since most of our electronic exports go to the United States, I am not so sure what demand would be like in the fourth quarter."

Finance Secretary Jose Camacho said on Wednesday the government was looking to Asia rather than the United States for future growth.

He said Philippine export growth in the first half of the year actually came within Asia, not from the United States, Japan and Europe.

"There is a phenomenon going on in Asia that I think would put Asia in a different growth pattern. You see Asian economies trying to become less dependent on exports to the developed world, and I think that’s going to be a good signal to us," Camacho told reporters on the sidelines of a banking forum.