Target likely to be missed as exports fall

MERCHANDISE exports took a dive in August — the weakest performance in eight months — weighed down by a strong peso and a sustained drop in outbound electronics shipments.

Raw sugar exports mulledExports down by 9% in August’Sin’ tax bill criticizedCorn exports seen by yearendOutbound shipments pick up.

Exports declined by 9% to $3.80 billion from $4.17 billion a year ago, the National Statistics Office reported. This was after gains for four consecutive months.

The August result brought aggregate merchandise exports for the year to $35.28 billion, still up by 5.4% from last year’s $33.48 billion but putting the government’s 10% full-year target at risk. On a monthly basis, exports plunged by 19.7%, a reversal of the previous month’s 9.6% gain.

Trade Secretary Gregory L. Domingo said this year’s 10% export growth target would likely be missed. The goal won’t be changed, however, and Mr. Domingo added that he expected 2012 growth of between 5-7%.

“Obviously we might not be able to achieve the 10% target but we won’t change targets anymore. We didn’t expect the huge drop in electronics,” the Trade chief said at the sidelines of a business conference.

Philippine Exporters Confederation, Inc. President Sergio R. Ortis-Luiz, Jr. said the stronger peso, which hit P41:$1 levels in July , was the culprit.

Trinh D. Nguyen, Hongkong and Shanghai Banking Corp. economist, noted that the drop came despite a favorable base effect.

“This reflects weak demand in the US, China and Europe as well as the Philippines’ declining competitiveness in electronics,” she said, adding that sluggish demand would likely extend to next year.

Electronics posted losses for a fifth consecutive month in August. Sales totaled $1.77 billion, down by 14.9% and bringing the year-to-date loss to 8.1%.

“Projections will be discussed in the meeting on the 25th. But we might downgrade,” Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) President Ernesto B. Santiago said.

SEIPI in July lowered its growth forecast for the year to 5-7% from 10-15%. — K. J. Q. Ang and E. N. J. David