Exports suffer biggest decline in 2 yrs

MANILA, Philippines -The country’s merchandise exports recorded a double-digit drop of 15.1 percent in August this year, the sharpest decline in 24 months, due largely to shrinking global demand for electronics and semiconductors, the National Statistics Office (NSO) reported yesterday.  

The government statistics office said exports amounted to $4.053 billion in August, down more than 15 percent from $4.774 billion in the same period last year. The latest drop was the steepest since September 2009. Compared to the previous month, exports dropped by 8.5 percent.

For the eight-month period, exports managed to grow by a paltry 0.7 percent to $33.239 billion from $33.021 billion a year ago.

Analysts said the dismal export performance has raised doubts whether the country would be able to hit its economic growth forecast for this year.

The government has forecast GDP growth at five to six percent this year, and a nine to 10 percent increase in exports.

“Weak demand for electronic products from key Western markets remains the main bugbear, with near one percent peso depreciation in the month offering little competitive support to the exporters,” said Radhika Rao, economist at Forecast Pte in Singapore.

“Overall data validates the bearish outlook on the external sector for the second half of the year, with full-year growth likely to average in single-digits compared to 35 percent rise last year,” she said.

In 2009, exports shrank by 21.9 percent after a 2.8 percent drop in 2008.

Electronics shipments, which account for more than 50 percent of total dollar income, shrank 30.6 percent to $2.074 billion in August from $ 2.989 billion a year earlier, the statistics office said.

Articles of apparel and clothing accessories emerged as the second biggest export earner in August with total receipts of $173.44 million. The figure, however, was 4.1 percent lower than last year’s $180.92 million.

Woodcraft and furniture ranked third with sales amounting to $165.94 million followed by ignition wiring set and other wiring sets with earnings amounting to $105 million. Coconut oil, including crude and refined with 2.4 percent share to total export receipts ranked fifth with $95.32 million.

Rounding up the list of the topf 10 exports for August were: metal components, $69.22 million; cathodes and section of cathodes, $64.30 million; other products, $57.73 million sugar, $42.52 million; and pineapple and pineapple products, $37 million.

Shipments to Japan, the country’s top export destination in August, rose 7.3 percent from a year earlier, as the country’s Asian neighbor continued its rebuilding efforts after a massive quake and tsunami in March. 

But orders from other major markets like the United States and China dropped 4.5 percent and 5.4 percent, respectively from a year ago.

Exports to the US amounted to $614 million in August, down 4.5 percent from $643 million a year ago while shipments to China declined to $569 million from $601 million a year ago.

“The outlook remains poor as these trends are likely to persist. Next month should see an especially large fall from the record high reached in September 2010,” said George Worthington, an economist at IFR Markets in Sydney.  

The Semiconductor and Electronics Industries in the Philippines (SEIPI) has said it expects exports to contract five percent this year, revising a previous forecast of at least 8 % growth, because of the weakening global economy.