The country’s export revenue slid for the eighth straight month in November, dropping by 1.1 percent year-on-year to $5.117 billion even as electronics—the country’s top export earner—“showed signs of recovery” that month, the government said Tuesday.
The National Economic and Development Authority (Neda) sees earnings from shipments to overseas markets improving this year, although the effects of the dry spell due to El Niño coupled with China’s economic woes would pose challenges, the country’s chief economist said.
A preliminary report of the Philippine Statistics Authority (PSA) showed that export sales declined in November last year from $5.175 billion in the same month in 2014, bringing 11-month receipts down by 5.8 percent to $53.988 billion from $57.299 billion a year ago.
“Meeting our export targets has been very challenging as the global economy remains weak, which translates to weak demand for the country’s export products. Given the performance of the export sector in the first 11 months of 2015, the full-year target is unlikely to have been met,” Economic Planning Secretary and Neda Director General Arsenio M. Balisacan said in a statement.
“To achieve the full-year target for 2015, merchandise exports in December would have to be $11 billion, equivalent to a growth of 129 percent,” he said.
In September, Balisacan had conceded that the government’s 7-percent exports growth goal for 2015 would be difficult to reach.
The year-on-year drop in November was, however, the slowest since exports declined monthly since April.
Neda noted that “with the continued recovery of export of electronic products, the decline was much slower, compared with the 10.8-percent decline in the previous month.” Exports of manufactured goods rose by 3.6 percent in November on the back of the recovery of the electronics sector, it said.
“The country’s positive performance in the sales of semiconductors bucked the international trend as worldwide sales were down in November. Thus, the modest growth in exports of goods from the electronics and semiconductors segment is expected to continue propping up total merchandise exports,” Balisacan said.
In 2016, Balisacan said the top risks to export growth remained the onslaught of El Niño, which would still be felt in the first few months of the year, and China’s economic woes.
“The bigger concern is the sharp slowdown in China. Many did not expect that the slowdown will be as fast as the recent numbers,” he said.
“Although a slight uptick is anticipated in 2016 for exports, risks are skewed toward the downside as a more protracted slowdown across emerging economies could have substantial spillovers to other developing economies and eventually hold back recovery in advanced economies,” he said.
Balisacan is nonetheless optimistic about prospects for exports to Japan, the top destination of Philippine-made goods. “On the bright side, the Nikkei Japan Manufacturing Purchasing Managers’ Index output growth accelerated to a 20-month high in November, signaling solid growth in the Philippines’ top export market.