Philippine exports fell by 10.8 percent in October 2015 on account of continued sluggish external demand according to the National Economic and Development Authority (Neda).
The Philippine Statistics Authority reported today that merchandise exports fell to $4.6 billion in October 2015 from $5.1 billion recorded in the same period last year.
“The lingering sluggish global demand, as well as the slack in industrial activity in the United States and the recent economic adjustments in China, brought down the country’s exports. Exports performance in the succeeding months is also anticipated to remain weak given the slowdown in economic growth of the country’s major trading partners,” Economic Planning Secretary Arsenio M. Balisacan said in a statement.
All key commodities registered drops in exports for October, particularly manufactured goods, agro-based products, mineral products, and petroleum products.
Manufactured goods, which make up 88.5 percent of the country’s total merchandise exports for October 2015, declined by 5.1 percent. It fell to $4.1 billion from $4.3 billion in October 2014.
“Despite the decline, this is an improvement from its double-digit drop of 24.7 percent in September, following the slight improvement in the global manufacturing industry. This is particularly due to the recovery of shipments of electronic products that grew by 7.3 percent, on the back of stronger exports in semiconductors which grew by 11.7 percent,” he said.
Exports of mineral products also declined by 56.1 percent to $150.9 million in October 2015 from $343.9 million in the same month last year. This is due to lower earnings from copper metal, copper concentrates and other mineral products.
“The lower volume of export of mineral products reflects the continued decline in the prices of metal commodities in the global market. International prices of iron ore and copper, which are the country’s two top minerals exports, declined significantly, resulting in lower revenue,” said Balisacan, who is also Neda director-general.
Also, petroleum exports dropped by 57.9 percent, while agro-based products likewise contracted by 29.8 percent to $264.5 million from $376.6 million revenues registered in the previous year.
Meanwhile, structural and economic adjustments in China have affected Philippine export performance, with revenue losses dragging down exports growth for October. From January to October 2015, export revenues to China contracted year-on-year by 24.7 percent.
“As the global economy remains fragile, export-oriented firms in the Philippines should recalibrate its production and marketing processes to serve the domestic market instead to facilitate this,” Balisacan said.
He also stressed the need to collaborate with the private sector in order to facilitate marketing export products to the domestic market.
“However, we remain positive as substantial improvement in Japan’s industrial sector may partially offset the downward pull from weakness in US and China in the coming months. There is strong international demand for Japanese products and this will be a major factor in sustaining robust industrial growth,” he added.
Furthermore, Balisacan underscored the need to tap the potential of the services sector specifically tourism, indicating an expected surge of demand for services related to recreation and travel.
“Several manufacturing firms are also considering relocating to emerging economies. The country should thus take advantage of this opportunity by improving its competitiveness as an investment destination,” he said.
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