PH exports drop for 16th month

The country’s exports declined at a faster rate than imports at the start of the second half on sluggish global trade, the government reported Friday.

Preliminary Philippine Statistics Authority (PSA) data showed that merchandise exports dropped 13 percent year-on-year to $4.7 billion in July—the 16th straight month that sales of Philippine-made goods to overseas declined.

Eight commodity groups posted year-on-year drops in exports: machinery and transport equipment (down 36.8 percent); woodcrafts and furniture (down 24.2 percent); other mineral products (down 18.9 percent); chemicals (down 18.7 percent); electronic products (down 14.8 percent); articles of apparel and clothing accessories (down 14 percent); ignition wiring set and other wiring sets used in vehicles, aircrafts and ships (down 1.8 percent); as well as metal components (down 1.7 percent).

The PSA said only exports of coconut oil and other manufactures rose year-on-year by 42.6 percent and 7.7 percent, respectively, last July.

In a statement, the National Economic and Development Authority (Neda) blamed the exports drop mainly on the “decrease in demand for Philippine products from traditional markets such as Japan, China, Hong Kong and the USA.”

To address this, Socioeconomic Planning Secretary Ernesto M. Pernia said the export sector “must continue to expand presence in non-traditional markets to reduce dependency on traditional markets,” noting of “hefty increases” in exports to France and Mexico, which rose 59.2 percent and 22.4 percent, respectively, in      July.

Meanwhile, the value of imported products that entered the local economy also posted a drop of 1.7 percent year-on-year to $6.7 billion, cutting short the four previous months of growth, PSA data showed.

Imports of mineral fuels, lubricants and related materials dropped 26.3 percent year-on-year; electronic products, down 8.1 percent; and iron and steel, down 5.7 percent.

Goods imported from China, Hong Kong, Japan and Singapore nonetheless posted growth in July, Neda said.

As of end-July, merchandise exports dropped 8.3 percent year-on-year to $31.5 billion, while imports during the first seven months grew 14.4 percent to $45.5 billion.

As import receipts continued to exceed export sales, the seven-month trade in goods deficit further widened to almost $14 billion from $11.9 billion a month ago.

In July alone, the total revenues from trade dropped to $11.4 billion from $12.2 billion a year ago, Neda said.

Pernia, who is also the Director-General of Neda, had said that among the domestic downside risks to growth include the widening trade deficit.

“Imports have been growing faster than exports so we need to watch out. We don’t want the trade gap to explode,” according to Pernia.

The Neda chief had said that the country’s trade deficit is expected “to be there for some time.”