August exports tumbled 6.3%
Exports tumbled 6.3 percent in August from a year ago, as the fragile global economy led to lower demand for the country’s agriculture and mineral products, data from the Philippine Statistics Authority show Friday.
This marked the fifth straight month of export contraction, following a 1.8-percent decline in July and June, 17.4-percent slide in May and 4.1-percent drop in April.
Data from PSA showed merchandise exports fell to $5.1 billion in August from $5.5 billion in the same month last year and $5.3 billion in July this year. This brought total exports in the first eight months to $41.13 billion, down by 4.4 percent from $39.34 billion a year ago.
“The latest export performance mirrors the recent developments in the global economy: the slowing down of global trade, sluggish momentum in industrial production in major economies, and downward price pressure on commodities,” said Economic Planning Secretary Arsenio Balisacan.
“With the absence of fresh triggers to spur renewed demand from major advanced economies, the exports sector is expected to remain constrained in the coming months,” Balisacan, who is also the director-general of the National Economic and Development Authority, said.
Neda said all selected trade-oriented economies in East and Southeast Asia posted negative exports growth in August, except Vietnam.
Standard Chartered economist Jeff Ng said sluggish global demand dragged down the exports growth.
Exports to the United States fell 4 percent year-on-year, while shipments to Japan fell 1.6 percent. Exports to China slid 23.5 percent year-on-year.
Ng said exports should improve soon as raw material and capital good imports posted good numbers lately.
He said the lower exports were not expected to directly affect the gross domestic product growth in the third quarter. “Export growth should not impact on GDP growth too much due to solid private consumption, investment and services export growth,” he said.
Data showed outbound shipments of mineral products plummeted 48.4 percent to $213.6 million from $413.9 million in August, following the lower earnings from copper and other mineral products.
Agriculture exports posted the steepest decline this year at 37.4 percent, marking its seventh consecutive month of lower earnings. This was on account of lower receipts from coconut products, fruits and vegetables, sugar products, and other agro-based products.
“Moreover, the exports sector remains constrained by sluggish global demand, low oil prices, and most importantly, the threat of El Nino to the agriculture sector,” said Balisacan.
“Over the medium term, we encourage tapping new markets, diversifying export products, and pursuing innovation in order to secure growth, stability and competitiveness for the export sector,” he said.
Balisacan said this should be supported by government’s effort to develop infrastructure, improve business regulations and logistics, and lessen foreign investment restrictions in the country.