Exports, manufacturing continue to weaken in June

MANILA, Philippines - The exports and manufacturing sectors continued to weaken in June due to the sustained drop in global demand and business interruptions during the rainy season, the National Economic and Development Authority (NEDA) said.

Citing reports released by the Philippine Statistics Authority, NEDA said exports fell for the third consecutive month in June despite the recovery of the electronics sector.

For the six-month period, merchandise exports slipped 4.7 percent to $28.8 billion.

NEDA added the manufacturing sector also continued to contract in terms of volume and value last June.

“Weak external demand continues to affect the country’s external trade performance, particularly for the merchandise exports sector.  Year-to-date outcome, in terms of both value and volume, suggests fragility in the demand, particularly in major trading partners,” said Economic Planning Secretary and NEDA director general Arsenio M. Balisacan.

The PSA said the country’s merchandise exports declined 3.3 percent to $5.3 billion in June 2015 from the same period last year on account of lower revenues from total agro-based and mineral products.

“This decline reflects a still fragile global economy that is felt across the region. Most of the major economies in East and Southeast Asia also registered negative export performance in June 2015, with only Vietnam and PR (People’s Republic) China in the positive territory,” said Balisacan.

On a positive note, the country’s higher sales of exported manufactured goods (3.4 percent), particularly electronics, and petroleum tempered the exports decline during the month. The electronics sector gained momentum as exports of electronic products rose 9.5 percent during the month, buoyed by semiconductors (16.9 percent). This is a strong reversal from the year-on-year reduction of 7.5 percent last month.

“The country’s relatively strong semiconductor exports emulated the progress in the global semiconductors market as worldwide sales continued to expand at its 26th consecutive month, as reported by Semiconductors Industry Association,” Balisacan said.

Meanwhile, revenues from the country’s agricultural exports continued to fall in June 2015, marking its fifth consecutive month of double-digit decline for the year. The value of outward shipments of agro-based products fell 24.9 percent on account of lower revenues from fruits and vegetables, sugar and coconut products and other agro products.

Similarly, exports of mineral products decreased by 26.2 percent in June 2015 due to lower earnings from copper metal and other mineral products. Also, mineral product exports to the country’s top markets posted steep declines in June 2015, particularly China, Switzerland and Thailand.

In the PSA’s Monthly Integrated Survey of Selected Industries for June 2015, the manufacturing sector’s volume of production index (VoPI) further contracted 3.6 percent from a two percent drop in May, a complete reversal from last year’s double-digit growth of 12.7 percent for the same month.

Moreover, the value of production (VaPI) declined 7.3 percent year-on-year for this period.

“Despite these figures, there is a sustained positive outlook for the construction-related sectors backed by brisk construction activities. This is fueled by the growth of tourism, continued implementation of infrastructure-related government projects, and robust information technology and business process outsourcing,” Balisacan said.