Exports shrink at steepest pace in 4 years

MANILA, Philippines – Philippine exports shrank 24.7 percent in September, the steepest drop in four years.

The Philippine Statistics Authority (PSA) said this was the largest decline in export revenues since September 2011 when the supply-chain disruption in key Asian countries then caused a sharp decline in demand for electronics.

Export sales amounted to $4.405 billion in September, lower than the $5.846 billion recorded value in the same month in 2014.

In the first nine months this year, merchandise exports registered a 6.9-percent drop from $46.976 billion in 2014 to $43.746 billion.

Socioeconomic Planning Secretary Arsenio M. Balisacan said the export numbers merely mirrored the sluggish external demand due to weak global economic activity and depressed commodity prices which continue to strain exports growth.

“Nonetheless, signs of a possible rebound of the country’s merchandise exports in the fourth quarter are likely, owing to better prospects in Japan, US and the euro zone,” Balisacan said.

Manufactured goods, which comprise about 87 percent of the country’s total merchandise exports, posted a year-on-year decline of 23.6 percent in September 2015. Value fell to $3.8 billion from $5 billion in the same period last year.

“This reflects the still weak global manufacturing sector, which can be traced to the sluggish final demand and ongoing inventory adjustments,” Balisacan said. “The third quarter export figure has dragged down the (economic) growth.”

Also, outward shipments of mineral products decreased year-on-year by 32.6 percent, while petroleum products declined 83.7 percent to $13.7 million in September 2015 from $83.8 million in the same period last year.

“The government needs to further strengthen its efforts to diversify export markets in order to dissipate the impact of weak demand from a relatively concentrated market. Tapping the opportunities from the export of services such as outsourcing or information technology-business process outsoourcing can in part compensate for the decline in goods exports,” said Balisacan, who is also NEDA director-general.

He said maximizing the potential of free trade agreements should be explored together with implementing programs that will address bottlenecks that affect the competitiveness of the export sector.

“We need to explore the country’s inclusion in the Trans Pacific Partnership (TPP) agreement, which can bring enormous benefits to participating countries in terms of trade,” said Balisacan, citing Vietnam’s continuous growth in exports its ability to take advantage of trade opportunities.

Electronic products remained the country’s top export with total receipts of $2.393 billion, accounting for 54.3 percent of the total exports revenue in September.

However, shipments fell 2.1 percent from $2.443 billion registered in September 2014.

Total export receipts from the country’s top 10 market destinations for the month of September 2015 was valued at $3.668 billion or 83.3 percent of total.

Japan remained as the country’s top export destination with revenue amounting to $905.84 million, comprising 20.6 percent share to total exports for September 2015. However, it decreased 47.7 percent from $1.733 billion recorded in the same month a year ago. –Ted P. Torres (The Philippine Star)