Decline in PH Exports Marks Slowdown of Global Economy

Philippine merchandise exports registered its sharpest drop since December 2011 as it declined by 17.4 percent in May 2015, according to the National Economic and Development Authority (NEDA).

“The recent outturn of Philippine exports, as well as in many Asian economies, reflects the general market outlook and consensus in the near term, signaling a slowdown of the global economy,” said NEDA Officer-in-Charge (OIC) and Deputy Director-General Emmanuel F. Esguerra.

The Philippine Statistics Authority reported today that total revenue from Philippine exports reached US$4.9 billion in May 2015, down from US$5.9 billion in the same period last year. The Philippines recorded the largest decline of export revenues among major trade-oriented economies in East and Southeast Asia.

“Slowdown in global trade due to the weakening of China as well as the fiscal crisis in the Eurozone will certainly spill over globally, although the magnitude of the impact remains to be seen. Policy makers should remain vigilant on the possible outcome of these external developments and how they may impact the trade competitiveness of the country as well as the domestic economy,” the NEDA official added.

After two consecutive months of marginal increases, overseas sales of manufactured goods registered its largest monthly decline (9.5%) for the year, down to US$4.3 billion in May 2015 from US$4.7 billion in the same period last year. This can be attributed to lower revenues from semiconductors, machinery & transport equipment, wood manufactures, electronic data processing, and other manufactures.

“Global output of manufacturing and services is currently weak, trending slightly above expansionary levels amid the lackluster global demand,” said Esguerra.

Similarly, exports of mineral products decreased by 66.5 percent in May 2015, plunging to US$209.7 million in May 2015 from US$626.8 million in May 2014 due to lower earnings from copper metal, copper concentrates and other mineral products.

Furthermore, export revenues from agro-based products dropped by 32.3 percent in May 2015, a strong reversal from a 13.4 percent year-on-year expansion in the same month of last year. This is attributed to decreased earnings in coconut products, sugar products, and fruits & vegetables such as bananas.

“The Philippines’ export performance is likely to remain constrained by volatilities in the international markets triggered by the Greek debt crisis and the slowdown in China. Given that these external shocks cannot be prevented, government measures to mitigate the possible negative effects should be immediately implemented as warranted.” he said.

Thus, Esguerra stressed the need for strengthening the support to the manufacturing sector in terms of increasing its competitiveness and productivity, and ensuring safety nets for vulnerable workers. He said initiatives to support agriculture and its linkage with the manufacturing sector should be also continued. These include infrastructure, financing, risk mitigation, and business-continuity and contingency planning

“As the external environment continues to be unfavorable and fragile, strengthening domestic demand should be a priority,” he said.