Exporters to continue seeing drop in sales as weak demand to persist

The country’s lackluster export performance is expected to continue this year on the back of weak global economic growth, according to the National Economic and Development Authority (Neda).

In a statement, Economic Planning Secretary Arsenio M. Balisacan said that while the country’s export earnings may post a “slight uptick” this year, external factors, such as weak global demand will paint a grim picture in export performance.

“Although a slight uptick is anticipated in 2016 for exports, risks are skewed toward the downside, as a more protracted slowdown across emerging economies could have substantial spillovers to other developing economies and eventually hold back recovery in advanced economies,” Balisacan said.

To minimize the country’s export losses, Balisacan urged the government to improve the competitiveness of local industries, especially in the light of the Asean economic integration, which took effect on January 1, 2016.

Balisacan said the government can do this by encouraging local businesses to diversify their products and expand their export market.

The country, he said, can also maximize the Asean single market, and trade with nontraditional export markets in the region.

“The government needs to continue to strengthen efforts to improve competitiveness of our local industries as the other Asean member-states continue to improve theirs. A well-organized and coordinated mechanism that can provide negotiating experience, policy research and analytical preparation support, as well as physical and financial resources, will need to be institutionalized,” Balisacan said.

In November 2015 the Philippine Statistics Authority (PSA) disclosed that export earnings posted a contraction of 1.1 percent to $5.12 billion.

Merchandise exports for the January-to-November period posted a contraction of 5.8 percent to $53.988 billion from $57.299 billion in the same period in 2014.

This lackluster performance will cost the country to miss its export-growth target of 5 percent in 2015. The country’s export performance has been in the red for the first 11 months of 2015 except for March, when exports posted a 2-percent growth.

“In order to achieve the full-year target for 2015, merchandise exports in December 2015 would have to register a total of $11 billion, equivalent to a growth of 129 percent,” Balisacan said.

Still, Balisacan said the Philippines recorded the least export decline among the monitored economies in East and Southeast Asia for November 2015. Except for Vietnam, most economies in the region posted slower growth in merchandise exports.

He added that all key commodities registered double-digit declines, except for manufactured goods, which posted a 3.6-percent year-on-year increase, as shipments of electronic products continued to recover.

The country’s top export, electronic products, booked $2.774 billion worth of earnings. This represented 54.2 percent of the total exports revenue in November 2015.

It increased by 9.3 percent from $2.539 billion registered in November 2014. The increase was largely due to the 5.7-percent growth in Components/Devices (Semiconductors).

Semiconductors accounted for 38.3 percent among electronic products. It amounted to $1.961 billion in November 2015, higher than the $1.855 billion in November 2014.

“The country’s positive performance in the sales of semiconductors bucked the international trend, as worldwide sales were down in November 2015. Thus, the modest growth in exports of goods from the electronics and semiconductors segment is expected to continue propping up total merchandise exports,” Balisacan siad.

The country’s total export receipts from its top-10 market destinations for the month of November 2015 was valued at $4.340 billion, or 84.8 percent, of the total.

Japan, including Okinawa, remained as the country’s top export destination with revenue amounting to $1.091 billion, comprising a 21.3-percent share to total exports for November 2015. However, this was a 1.8-percent decrease from $1.112 billion recorded in the same month a year ago.

The United States ranked second, accounting for 14 percent of total exports, with export receipts valued at $716.73 million in November 2015. It recorded an increase of 5.1 percent from $682.11 million in same month last year.

Hong Kong ranked third with $557.71 million, or a 10.9-percent share in the total exports. It grew by 21.3 percent from $459.89 million in the same month a year ago. –Cai Ordinario, Businessmirror