Export growth drops sharply to 3.2% in July

The country’s merchandise exports grew by only 3.2 percent to $3.106 billion in July from $3.009 billion in the same period last year, the National Statistics Office (NSO) reported yesterday.

The growth decelerated further from the 8.2 percent recorded in June and from the 18-month high of 15.3 percent posted in May.

Some analysts said the slow growth was likely to be temporary but the export numbers are not encouraging for an economy burdened by $61 billion in debt, high oil prices, corruption, tax evasion, rising unemployment and poverty.

"The risk of the Philippines’ export performance faltering at a faster pace, coupled with ongoing fiscal concerns, may lead to underperformance in the nation’s stocks and currency," said Danny Suwanapruti, regional analyst at Forecast Ltd. in Singapore.

In the first seven months of this year, merchandise exports rose 7.7 percent to $21.84 billion, the NSO said.

The government is aiming for a 10 percent growth in exports this year from 2003.

Electronics exports, which make up two-thirds of total shipments, were up just 0.7 percent in the year through July at $2.003 billion and slid 6.3 percent from June.

The important semiconductors segment – comprising two-thirds of total electronics exports – fell 3.7 percent in July from a year earlier.

The fall was cushioned by a 74.7 percent rise in exports of ignition wiring sets for vehicles, aircraft and ships.

Besides electronics items, most of which are assembled from imported parts, other key exports include clothing and textiles, coconut oil and tropical fruit.

Exports of apparel and clothing accessories were the second top foreign exchange earners, with receipts totaling $213.01 million, down 9.2 percent from a year earlier.

Ignition and other wiring sets used in vehicles, aircraft and ships ranked third with revenue of $64.89 million, up 74.7 percent.

Of total exports, shipments to the US accounted for 19.3 percent and were valued at $598.8 million, down 11.2 percent year-on-year.

Shipments to Japan followed with a 19.1 percent share, or total earnings of $593.68 million, up 28.0 pct.

Shipments to Hong Kong fell 11.6 percent to $230.06 million, accounting for 7. 4 percent of total receipts.

Trailing The Pack

Overall Philippine export growth in the year through July trailed Thailand’s 24.8 percent, Taiwan’s 26.1 percent and Malaysia’s 28.8 percent.

"This is still the effect of the uncertainty from the elections (in May). Exports need a lead time of three or four months," said Joey Cuyegkeng, economist at ING Bank in Manila.

"I think it’s temporary from that point of view, with the uncertainty issue now resolved. But then you have the question of slowing growth in the US."

Shipments to the United States, the largest market for Philippine exports, fell 11 percent in July from a year earlier but those to Japan jumped 28 percent.

Exports to Hong Kong and Singapore also slid in the year to July but shipments to China climbed 13.7 percent.

In the seven months to July, exports rose 7.7 percent to $21.84 billion from $20.273 billion a year earlier.

The Philippines has said it expects exports to rise by 10 percent this year and imports by 11 percent.

The country had trade deficits of $142 million in June and $18 million in May. Import data for July is due on Sept. 20.