Exports drop for 14th straight month in May

MANILA, Philippines – Exports declined for the 14th straight month in May mainly due to the persistent weakness in global demand, the Philippine Statistics Authority (PSA) reported yesterday.

Revenues from outbound shipments reached at $4.71 billion in May, down 3.8 percent from $4.90 billion in May 2015, on lower exports of mineral products, articles of apparel and clothing accessories, chemicals, metal components and electronic products.

Exports of electronic products in particular, which accounted for 48 percent of the total exports revenue in May, fell four percent to $2.26 billion from $2.36 billion in the same month last year.

In terms of destination, Japan remains the top landing spot for Philippine exports, accounting for 22.1 percent of total export receipts in May. Other top export markets are US, Hong Kong, China, Singapore, Thailand, Germany, Taiwan, Korea and Netherlands.

In the first five months of the year, export receipts shrank 6.6 percent to $22.7 billion from $23.7 billion in the same period last year.

As such, the National Economic and Development Authority (NEDA) said there is a need to refocus the export strategies of firms.

“The growth of exports is expected to remain muted for the rest of 2016 with the slow recovery of the global economy. Given soft demand, export-oriented firms may need to refocus their strategies to consider non-traditional markets, which have shown healthier appetites in recent months,” said Socioeconomic Planning Secretary Ernesto Pernia.

He cited the growth of exports to European countries such as France and Switzerland which grew 37.8 percent and 72 percent respectively in the first five months of the year. On the other hand, exports to traditional markets such as Germany and the Netherlands declined 18.8 percent and 10.6 percent, respectively.

“It would also be important to increase the flexibility of export firms to cater to the domestic market given robust domestic demand. We also need to keep government spending on track to ensure that domestic demand continues to provide a cushion to mitigate the impact of the country’s weak exports growth,” said Pernia.

NEDA noted among seven selected Asian economies, only Vietnam posted positive export growth of 4.9 percent in May although this was lower than the previous month’s export growth rate of 7.5 percent.