Philippine exports drop for 16th month

Preliminary Philippine Statistics Authority (PSA) data showed that merchandise exports dropped 13 per cent year on year to US$4.7 billion in July – the 16th straight month that sales of Philippine-made goods to overseas declined.

Eight commodity groups posted year-on-year drops in exports: machinery and transport equipment (down 36.8 per cent); woodcrafts and furniture (down 24.2 per cent); other mineral products (down 18.9 per cent); chemicals (down 18.7 per cent); electronic products (down 14.8 per cent); apparel and clothing accessories (down 14 per cent); ignition wiring sets and other wiring sets used in vehicles, aircraft and ships (down 1.8 per cent); as well as metal components (down 1.7 per cent).

The PSA said only exports of coconut oil and other manufacturing rose year on year by 42.6 per cent and 7.7 per cent, respectively, last July.

In a statement, the National Economic and Development Authority (Neda) blamed the exports drop mainly to the “decrease in demand for Philippine products from traditional markets such as Japan, China, Hong Kong and the US”.

To address this, socio-economic planning secretary Ernesto M Pernia said the export sector “must continue to expand presence in non-traditional markets to reduce dependency on traditional markets”, noting “hefty increases” in exports to France and Mexico, which rose 59.2 per cent and 22.4 per cent, respectively, in July.

Meanwhile, the value of imported products that entered the Philippines economy also posted a drop of 1.7 per cent year on year to $6.7 billion, ending four previous months of growth, PSA data showed.

Imports of mineral fuels, lubricants and related materials dropped 26.3 per cent year on year; electronic products down 8.1 per cent; and iron and steel down 5.7 per cent.

Goods imported from China, Hong Kong, Japan and Singapore nonetheless posted growth in July, Neda said.

As of July end, merchandise exports dropped 8.3 per cent year on year to $31.5 billion, while imports during the first seven months grew 14.4 per cent to $45.5 billion.

As import receipts continued to exceed export sales, the seven-month trade in goods deficit further widened to almost $14 billion from $11.9 billion a month ago.

In July alone, the total revenue from trade dropped to $11.4 billion from $12.2 billion a year ago, Neda said.

Pernia, who is also the director-general of Neda, had said that among the domestic downside risks to growth were the widening trade deficit.

“Imports have been growing faster than exports so we need to watch out. We don’t want the trade gap to explode,” Pernia said.

The Neda chief said the country’s trade deficit is expected “to be there for some time”.