Exports down for 8th straight month in May

MANILA, Philippines – The country’s exports fell for the eighth straight month in May on weak global demand for key electronics but the decline seems to be moderating, the National Statistics Office (NSO) said yesterday.

Shipments for the month fell 27 percent from a year earlier to $3.086 billion, compared to a 35.2 percent plunge in April, the NSO said.

Compared to the previous month, May exports rose 10.1 percent, it added, only the second time a month-on-month rise has been recorded since the country’s trade was hit by the global economic crisis in October.

Socioeconomic Planning Secretary Ralph Recto attributed the month-on-month improvement to the positive performance of the mineral and manufactured products sector.

“The month-on-month recovery of merchandise exports in May was due to improvements in export receipts of manufactured products, mineral products and total agro-based products,” Recto said in his memorandum to President Arroyo.

Recto also said that the “positive month-on-month growth rates of electronics (7.6 percent), machinery and transport equipment (26.5 percent), and garments (9.8 percent), which constituted 66.3 percent of the total merchandise exports, helped boost manufactured exports in May.”

Furthermore, he said that the improvement in shipments of electronic products benefited from the 5.4 percent increase in global sales for the period April to May 2009. Sales of semiconductors grew in the Americas (3.9 percent), Europe (0.4 percent), Japan (7.2 percent), and Asia Pacific (6.7 percent).

Likewise, export receipts from mineral products and total agro-based products registered better performances in May 2009 as these commodity groups posted month-on-month increases of 18.9 percent and one percent, respectively.

Exports in May brought total export receipts to $13.8 billion for the first five months of the year, a contraction of 34.5 percent from a year ago.

“For the first five months of 2009, total receipts from merchandise exports contracted by 34.5 percent to $13.8 billion as the export sector continued to be adversely hit by the decline in world trade due to the global economic crisis,” Recto said.

Japan still emerged as the biggest overseas market for Philippine goods with a 16.4 percent share in the total value of merchandise exports in May 2009. The US slid to second place with a 16 percent share in the total value of outbound shipments in May.

China had a 9.8 percent share while the Netherlands had a 9.3 percent share. Hong Kong (8.5 percent) completed the top five biggest sources of receipts from overseas sales in May.

In addition, the value of outward shipments to China, Hong Kong and Taiwan comprised 22.1 percent of the total merchandise exports in May 2009.

Semiconductor devices, electronic data processing (EDP) machines, and garments were the major shipments to the five biggest export markets, covering 65.6 percent of the value of the total cargoes delivered to the said countries.

Total exports to the five markets dropped sharply by 26.4 percent from May 2008. However, orders from these countries already improved by 7.8 percent compared to the previous month.

“The export trend in the Philippines is in line with the rest of the region,” economist Song Seng Wun of CIMB-GK Goh in Singapore told Dow Jones Newswires.

“Much still depends on consumer demand in the US and OECD (Organization for Economic Cooperation and Development) countries,” Song said. He added that year-on-year numbers will remain volatile, with sales in June needing to top $3.3 billion for the decline to continue narrowing.

Erwin Balita of SB Equities said data in recent months show “signs of a bottoming” in Philippine exports and are consistent with the local electronics industry’s claim of improvement in monthly sales.

“But the jury is still out if we’re on the road to recovery. A lot depends on global demand,” Balita added.