April exports plunge 35% to $2.803 billion

MANILA, Philippines – The country’s export earnings plunged by 35.2 percent to $2.803 billion in April, the seventh consecutive month of year-on-year decline for exports, the National Statistics Office (NSO) reported yesterday.

The latest figure is a huge drop from the $4.33 billion recorded in the same period last year. It was also slightly lower than the country’s March exports, which suffered a 30.9-percent decline at $2.9 billion. Month-on-month exports in April fell by 3.6 percent to reverse a 16- percent growth in March.

The Philippines is not alone in Asia to post dismal April exports and analysts said more volatility is likely in May and June because of a high base in the first half last year. “Exports are coming in softer than expected with manufactures showing little improvement, suggesting that external sector risks have not abated as much or as quickly as was being hoped for,” said Vishnu Varathan, an economist at Forecast in Singapore.

Shipments of electronic products, which accounted for 60.1 percent of total export revenues, plunged 33.2 percent to $1.69 billion from $2.51 billion recorded in the same month last year. This was mainly caused by the 34.2-percent decrease in semiconductor exports, which took the biggest share of electronic products at 44.2 percent.

The data surprised the local electronics industry, which had expected exports to have bottomed out in the first quarter.

“Everything we are seeing is the other way,” Arthur Young, chairman of the semiconductor and electronics industry group said regarding the trend in electronics exports.

“Intel is not producing   anymore , this is probably one of the reasons why,” Young said, adding the May and June data should show better results.

Aside from electronics, other key exports of the Philippines include garments and accessories, vehicle parts, petroleum products, woodcrafts and furniture, bananas, tuna, and other metal components.

Almost all of the country’s top exports suffered year-on-year declines in April except for tuna, which posted a 10-percent gain at $29.58 billion.

Exports of garments suffered a 34.6 percent drop to $100.43 million in April from $153.44 million a year ago. Shipments of cathodes and sections of cathodes were also down by 37 percent to only $62 million in April from $99.41 million a year ago.

Other top exports which exhibited a dismal performance were: petroleum products, down 44 percent to $52.66 million; woodcraft and furniture, down 44.3 percent to $51.29 million; and other manufactured products, down 16.3 percent to $49.83 million.

The United States remained the country’s top destination for exports in April, receiving $447.27 million or 16 percent of Philippine exports for the month. The amount, however, is a 35.3-percent drop from $691.38 million recorded in the same month last year.

Japan was the second-highest importer with export earnings of $433.86 million, followed by China ($306.86 million), Hong Kong ($265.76 million), Netherlands ($264.58 million), Singapore ($169.86 million), Germany ($149.69 million), Korea ($138.36 million), Malaysia ($114.74 million), and Taiwan ($104.49 million).

The government has earlier projected a 13 to 15 percent drop in export earnings this year from a 2.86-percent drop in 2008, as demand from main markets such as the United States continue to decline due to the global economic crisis.

It has also lowered its growth targets for the year at 3.1 to 4.1 percent, which may be cut further given the country’s dismal gross domestic product (GDP) growth of 0.4 percent for the first quarter of 2009.

“We would possibly downscale our growth targets, but it is still positive,” Socioeconomic Planning Secretary Ralph Recto told reporters on Tuesday. The government is set to review and approve the proposed changes to the country’s growth targets today.

Edgardo Lacson, president of the Philippine Chamber of Commerce and Industry, the country’s main business group, said that despite the poor export performance, he was still “very optimistic” about the economy.

“Exports are still down because worldwide demand has fallen but we can feel some relief because the US economy appears to have bottomed out,” he said.

Other cornerstones of the economy, such as the remittances of the 10 million Filipinos working overseas and the earnings of call-centers and other business outsourcing operations in the Philippines, were still doing well, he said.

Local industry association the Semiconductor and Electronics Industries in the Philippines Inc., said in a statement that its preliminary figures indicate May exports will be better.

But it conceded that for the whole year, it forecasts exports to contract by 20-30 percent. – with abs.cbnNEWS.com, Reuters