Exports rebound at 6.9% in May

According to the Institute for Development and Econometric Analysis, Inc. latestNewsBriefs, in May 2014, export earnings escalated to $5.48 billion, a 6.9% increase from $5.13 billion a year earlier. From January to May, total exports clocked at $24.4 billion, up 5.8% during the same period last year. Japan remains as the Philippines' top destination of exports.

The country's top export, electronic products, continued to slide to $2.05 billion, 1.6% less from a year ago. Semiconductors' sales plummeted by 18.1% to $1.43 billion, from $1.75 billion in May 2013.Offsetting the decrease were the surge in the earnings of other manufactures, machinery and transport equipment, metal components, and coconut oil. Sales from mineral products more than doubled to $625 million from $395 million in May 2013.

National Economic Development Authority  maintains a positive export outlook for the rest of the year as stronger global manufacturing activity is observed. NEDA Deputy Director-General Emmanuel Esguerra, however, warns of the adverse impact on agro-based exports of a possible El Nino episode in the coming months. He also adds that containing the coconut scale insect infestation, improving product quality and packaging, addressing the country's power issue, and intensifying the Industry Roadmapping Project will be crucial to sustain the growth in exports.

Per same published report, the BangkoSentral ng Pilipinas  cuts the country's balance of payments forecastfor 2014 to $1.1 billion surplus, a third of the previous $3 billion surplus estimate. The currentaccount component of the BoP, estimated to hit a $10.4 billion surplus, is now expected toonly reach a surplus of $6 billion. The revisions stemmed from the country's higher imports,lower exports, and the recent economic outlook for the country's major trading partners.

Furthermore according to IDEA, only thrift and rural banks appear to be tapping the BSP's discount window as borrowingsfrom January to June 2014 amounted to only P735 million, way below the P15.47 billionrecorded in the same period last year. Meanwhile, loans for housing and car mortgages aresubjected to tighter lending standards based on an April-June survey conducted by the BSP.Banks are trimming their real estate exposure and tolerance for risk.

 Likewise, the P2.606 trillion budget plan for 2015 is set to be fine-tuned as President Benigno Aquinocalled for last minute changes last Friday. Key expenditure areas outlined were for socialprotection and services, economic expansion and climate change adaptation. This year'sbudget stood at P2.265 trillion, 15% lower than the 2015 budget to be submitted by the endof this month.

Lastly it was reported that Japan-based credit rating agency, the Rating and Investment Information, Inc. (R&I)upgrades the Philippines' credit score to BBB with a stable outlook, citing brisk investmentand solid consumption driven by remittances. The government also awaits a possibleupgrade from Moody's following a positive meeting with the agency in London earlier thismonth. Last October, Moody's rated the country with a Baa3 and a stable outlook, according to the researchers of IDEA.

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