MANILA, Philippines (UPDATE) – Merchandise exports fell for the third straight month in July due to weakness in the electronics sector, although the value of total shipments hit a high for this year, the government reported Tuesday.
Data from the National Statistics Office (NSO) showed the country shipped out $4.43 billion worth of goods, down 1.7% from the year ago’s level of $4.505 billion. Exports fell 9.4% in June and 3.1% in May.
Electronics products, the main import item, shrank 21.3% from last year, also the third month in a row of over 20% decline, the NSO said.
Despite the decline, economists said the July figure was “better” than expected.
“I was expecting a bigger decline of 5% to 6%,” said Eugene Leow of DBS Singapore.
“July’s result was quite a bit better than the 6.8% fall IFR had expected,” added George Worthington, chief economist of Asia-Pacific IFR Markets.
However, they also said the outlook for the rest of the year remained bleak, with demand for electronics likely to continue to fall.
“Electronics seem to be doing badly, but what is holding up is the non-electronics sector. So If we grew 3.3% so far this year, and the outlook still looks very cloudy in the next few months, I think exports growth will probably be, at best, between 3% and 4% for the full year,” said Leow.
“The relevant industry body expects a 5% fall in electronics shipments for the year as a whole, but so far they have fallen 13.7%, meaning that the next five months combined will require a 5.5% increase which looks wholly unrealistic. A fall of around 10% to 15% looks more likely, approaching the 22.2% slump in 2009,” noted Worthington.
Exports account for about two-fifths of Philippine gross domestic product based on expenditure terms.
Socioeconomic planning Secretary Cayetano Paderanga has said the government’s 2011 macroeconomic targets, including the 9% to 10% export growth estimate and 17% to 18% imports growth forecast, will be reviewed after second quarter growth slowed more than expected.
Annual growth in the second quarter slowed to 3.4% from the previous quarter’s revised 4.6%, due largely to sluggish exports and weak government spending.
The Semiconductor and Electronics Industries in the Philippines has said it expects exports to contract 5% this year, lower than a previous forecast, because of the weakening global economy and supply chain disruptions following the massive earthquake in Japan in March.
The Philippines provides about 10%of the world’s semiconductor manufacturing services, including for mobile phone chips and micro processors.
Other top Philippine exports include garments and accessories, wood furniture, vehicle parts, coconut oil, and tropical fruits.
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Source: abs-cbnnews.com, with a report from Reuters, Sept. 13, 2011
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