MERCHANDISE EXPORTS contracted for the fifth straight month in September, plunging by 27.4% from a year ago as demand for electronic products further weakened, data from the National Statistics Office (NSO) showed.
The September figure was the steepest decline since April 2009, when exports dived by 35.21%. Industry officials blamed debt woes hounding Europe and a weak United States economy, but an economist said the problem may already be “structural,” as shown by the shrinking share of electronics.
Outbound merchandise shipments totaled $3.88 billion for the month, down from $5.34 billion a year earlier, NSO data showed. Month-on-month, export receipts tumbled by 6% from a revised $4.12 billion in August.
September’s result brought the 2011 exports tally so far to $37.18 billion, down 3.07% from $38.36 billion a year earlier.
Electronic products, which accounted for 46.8% of total export earnings, plummeted by 47.9% to $1.81 billion in September alone from $3.48 billion a year ago. Compared with August, it contracted by 12.6%. Electronics have historically accounted for around two-thirds of total exports.
The sector’s decline was traced to semiconductor exports, which fell by half to $1.45 billion in September from $2.90 billion.
As a result, the Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) is keeping its forecast of an 18% contraction for 2011.
“The market is weak right now given the global scenario and we are still expecting electronics exports to decline by 18%. Add to that, September 2010’s figure was the highest in the history of exports, which made it difficult for us to meet the number in September,” SEIPI President Ernesto B. Santiago said.
“Even if consumer spending is picking up, industrial spending on technology is flat because of the problems in Europe and the US,” he added.
University of Asia and the Pacific economist Victor A. Abola likewise attributed the plunge to overseas woes. “Electronics exports were down primarily due to weaker demand in advanced countries, especially in Europe where the debt crisis continued to fester,” he said in an e-mail.
“It is not clear though if these contractions were due to a large fall in demand, or the result of supply bottlenecks; nevertheless, the turmoil in Europe may be offset by the clearer, albeit weak, recovery in the US, and stronger domestic spending in emerging countries,” he added.
Sergio R. Ortiz-Luis, Jr., head of the Philippine Exporters Confederation, Inc., said: “We already expected that September will be worse given the problems in Europe and US. The next few months probably won’t be any better unless the situation overseas is solved.”
“Aside from that, the numbers are already showing that our 3-5% growth target for 2011 won’t be met, unless there will be a dramatic increase in the last three months. But chances are we’ll end the year either flat or in the negative,” he added.
University of the Philippines economist Benjamin E. Diokno concurred, but said the Philippines may already be behind the curve as far as the diversity of export products is concerned.
“From a peak growth of 46.8% in September 2010, exports have hit rock bottom and my worst fear is that the plunge in exports is structural,” he said.
“The genre of Philippine electronics exports is not in line with what the new generation of electronics products demands. From January to September last year, electronics products accounted for 61.2% of total exports; that share is down to 50.5 % this year. Diversification is happening not deliberately but is being imposed by changing market conditions,” Mr. Diokno added.
Electronics aside, other Philippine exports grew. Articles of apparel and clothing accessories, the country’s second highest export earner, improved by 11.4% year on year to $163.30 million for the September. Woodcraft and furniture — ranked third with a 4% share in total exports — went up by 34.6% to $153.02 million.
Japan was the top export destination in September with revenues reaching $685.16 million, followed by the People’s Republic of China with $547.64 million in sales. The US accounted for 13.4% or $518.73 million.
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By: Judy Dannibelle T. Chua Co
Source: Business World, Nov. 10, 2011
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