Total trade down, manufacturing growth slowed in June
Total trade declined and manufacturing growth slowed in June, such that the state planning agency National Economic and Development Authority on Thursday pushed for diversification of export markets to take advantage of global economic recovery.
Preliminary Philippine Statistics Authority (PSA) data showed that merchandise exports in June inched up 0.8 percent year-on-year to $4.91 billion, bringing the first-half shipments of Philippine-made goods to abroad to $31.04 billion, up 13.6 percent.
Imports, meanwhile, declined 2.5 percent year-on-year to $7.06 billion even as the value of products sourced overseas grew 9.6 percent year-on-year to $44.22 billion as of end-June.
In June alone, total trade went down by 1.2 percent year-on-year to $11.97 billion, while the trade-in-goods deficit narrowed to $2.15 billion from $2.37 billion a year ago as imports continued to outpace exports.
The dismal trade performance in June reversed the double-digit increase in both exports and imports in May.
At the end of the first half, total merchandise trade nonetheless jumped by 11.2 percent to $75.26 billion, such that the trade-in-goods deficit widened to $13.17 billion from $12.99 billion last year.
“We expect Philippine trade to recover, as the global economic recovery is seen to be on firmer footing in the second half of the year,” Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement.
“To help in tapping new trade markets, the country can take advantage of its European Union-Generalized System of Preferences Plus (GSP+) preferential status,” said Pernia, who is also the Neda chief, referring to the tax perks being enjoyed by certain Philippine products exported to the EU.
“In light of our hosting of the Asean Summit this year, our country is also in a better position to push for a reduction in non-tariff barriers within the region,” Pernia added, citing that non-tariff barriers to intraregional trade rose from 1,634 to 5,975 between 2000 and 2015 even as the Asean economic community that made the region a single market and production base is in full swing.
Neda noted that the growth in exports to Asean and the EU of 4.8 percent and 3.9 percent, respectively, in June, “cushioned the decline in traditional markets such as the US (down 8.7 percent), Japan (down 9 percent) and China (down 2.4 percent).”
“For Philippine imports, growth in Asean (up 4.5 percent) and the EU (up 0.5 percent) helped offset decline from the US (down 8.2 percent), China (down 3.7 percent) and Taiwan (down 33.1 percent)” in June, Neda added.
As for manufacturing, its growth, as measured by the Volume of Production Index (VoPI) slowed to 8.1 percent in June from 9.8 percent a year ago, the PSA’s Monthly Integrated Survey of Selected Industries for June 2017 showed.
Neda said that in the first six months, the manufacturing sector expanded by an average of 10 percent, faster than the 9 percent posted last year, on the back of “sustained domestic and improved external demand.”
“This growth was backed by increased production in food manufacturing, basic metals, transport equipment, fabricated metal products, non-metallic mineral products, and export-oriented products,” according to Neda.
Pernia said he was bullish about manufacturing moving forward, adding that “growth is expected to be sustained into the second semester.”
“Looking ahead, the outlook for the manufacturing sector remains optimistic on the back of favorable domestic conditions such as stable inflation rate, robust economic demand, increased investments and business confidence,” Pernia said. JE