Neda concedes to flat exports growth in 2015

THE NATIONAL Economic and Development Authority (Neda) has conceded that the 7-percent exports growth target for the year cannot be met, noting the flat overseas sales of Philippine-made goods.

But Economic Planning Secretary and Neda Director-General Arsenio M. Balisacan told reporters on Wednesday that it remains possible to achieve the 2-percent growth target for imports on the back of double-digit jumps in June and July.

A preliminary Philippine Statistics Authority (PSA) report released on Wednesday showed the value of imported goods that came in last July rose by 16.9 percent to $6.504 billion from $5.564 billion a year ago.

The increase posted in July brought the total imports value as of the end of the first seven months to $37.228 billion, up 0.1 percent from $37.175 billion last year.

In June, imports grew at a faster 22.6 percent year-on-year, reversing the preceding three straight months of decline.

“For the second consecutive month, the Philippines ranked first among monitored economies in East and Southeast Asia in registering imports growth in July,” Neda said in a statement.

“Except for Vietnam, most trade-oriented economies in the region recorded a decline in imports for the said period,” it added.

“The current trend in the import of capital goods, consumer goods and raw materials shows a robust domestic demand and a rebound in consumer sentiment towards the end of the year,” Balisacan said in the statement.

He said the steady growth in imports will fuel investments and household consumption in the third quarter of 2015.

“This will offset weak revenues from exports, which remains affected by dampened global demand,” he said.

In the case of exports, Balisacan said the government’s 7-percent growth target for 2015 would be difficult to reach.

Export revenues would likely just match last year’s $62.102 billion, he said.

The latest PSA data showed that end-July merchandise exports were down by 4.1 percent year-on-year to $34.214 billion. The export sector has been contracting on a year-on-year basis each month since December 2014.

“The global market is still a bit shaky. We haven’t seen the end of the tunnel yet for the Chinese economy: how far it would go down, [although] it’s probably plateauing. The US economy is bouncing back, but there are many other uncertainties out there. Hopefully, our trading partners will perform well in the coming months and exports will improve,” Balisacan said.

While merchandise exports remain weak, services—including information technology and business process management—continued to grow, he said.

“External trade as a whole is weaker than what we initially expected. But the good thing is that services exports are still doing very well [and] really offsetting the weak performance of merchandise exports,” he said.