Philippine merchandise exports registered its sharpest drop since December 2011 as it declined 17.4% in May 2015, according to the National Economic and Development Authority (NEDA).
Latest data from the Philippine Statistics Authority showed total revenue from exports reached US$4.9 billion in May 2015, down from $5.9 billion in the same period last year. The Philippines recorded the largest decline in export revenues among major trade-oriented economies in East and Southeast Asia, NEDA noted.
“The recent outturn of Philippine exports, as well as in many Asian economies, reflects the general market outlook and consensus in the near term, signaling a slowdown of the global economy,” NEDA officer-in-charge (OIC) and deputy director-general Emmanuel Esguerra.
“Slowdown in global trade due to the weakening of China as well as the fiscal crisis in the Eurozone will certainly spill over globally, although the magnitude of the impact remains to be seen,” Esguerra added.
He said policymakers should “remain vigilant on the possible outcome of these external developments and how they may impact the trade competitiveness of the country as well as the domestic economy.”
After two consecutive months of marginal increases, overseas sales of manufactured goods registered its largest monthly decline for the year, down 9.5% to $4.3 billion in May 2015 from $4.7 billion in the same period last year. This can be attributed to lower revenues from semiconductors, machinery and transport equipment, wood manufactures, electronic data processing, and other manufactures.
“Global output of manufacturing and services is currently weak, trending slightly above expansionary levels amid the lackluster global demand,” Esguerra stated.
Similarly, exports of mineral products decreased 66.5% in May 2015, plunging to $209.7 million in May 2015 from $626.8 million in May 2014, due to lower earnings from copper metal, copper concentrates, and other mineral products.
Furthermore, export revenues from agro-based products dropped 32.3%, a strong reversal from a 13.4% year-on-year expansion in May last year. This is attributed to decreased earnings in coconut products, sugar products, and fruits and vegetables such as bananas.
“The Philippines’ export performance is likely to remain constrained by volatilities in the international markets triggered by the Greek debt crisis and the slowdown in China. Given that these external shocks cannot be prevented, government measures to mitigate the possible negative effects should be immediately implemented as warranted,” Esguerra said.
The NEDA official stressed the need to strengthen support for the manufacturing sector by increasing its competitiveness and productivity, and ensuring safety nets for vulnerable workers. He said initiatives to support agriculture and its linkage with the manufacturing sector should also be continued. These include fortifying infrastructure, financing, risk mitigation, and business-continuity and contingency planning.
“As the external environment continues to be unfavorable and fragile, strengthening domestic demand should be a priority,” Esguerra said.
Japan remained the country’s top destination of exports, providing export revenues of $1.204 billion, followed by the United States with $696 million, and China with $529.15 million.
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