PH exports down for 10th straight month

Exports slid for the 10th straight month in January, an indication of sluggish trade for the rest of the year, the country’s chief economist said yesterday.

But weak external trade will be compensated by robust domestic demand, which pushed the growth in manufacturing output to a six-year high at the start of 2016, the National Economic and Development Authority (Neda) said.

A preliminary Philippine Statistics Authority (PSA) report showed that sales of Philippine-made goods abroad in January slipped 3.9 percent to $4.187 billion from $4.357 billion a year ago. Since April last year, the country has been posting monthly year-on-year declines in export revenue, with January’s drop the fastest in three months.

This early, Socioeconomic Planning Secretary Emmanuel F. Esguerra warned that weak global trade would hurt domestic export industries this year.

“The year 2016 is expected to be a challenging one for the export sector as the global economy faces sluggish economic recovery and uneven growth. We see global trade growth remaining at a low level as the world copes with soft demand and lower commodity prices,” said Esguerra, who is also the Director-General of the Neda.

Last month, the Cabinet-level, interagency Development Budget Coordination Committee cut its exports and imports growth targets for 2016 to 5 percent (from 6 percent previously) and 10 percent (from 12 percent), respectively.

Shipments of manufactured goods slid 2.2 percent year-on-year to $3.7 billion, although electronic products—the country’s top merchandise export commodity—grew by 5 percent to $2.1 billion.

“The fall in exports of manufactured products mirrors the general weakness of the global manufacturing sector. However, worth noting is the increase in the exports of electronic products that registered its eighth consecutive month of positive growth in January,” Esguerra said.

Agro-based exports also dropped by 7.6 percent to $289.1 million due to lower sales of coconut and fish products.

Esguerra attributed the decline in agro-based shipments to “continued tightness in supply due to persistent dry weather,” while “lower export revenues for fish products can be partly traced to the lower supply of fish in Region XII.”

Exports of minerals and petroleum products slid at faster rates of 27.8 percent and 17.8 percent, respectively.

The Neda chief was nonetheless more bullish of manufacturing amid sustained strong domestic demand.

The PSA’s Monthly Integrated Survey of Selected Industries for January showed that the Volume of Production Index (VoPI) jumped 34.3 percent that month—the highest since January 2010’s 36.2 percent, Neda data showed.

The VoPI last January hence exceeded the 2.6-percent growth a year ago as well as the previous month’s 5 percent.

The Value of Production Index or VaPI grew 26.5 percent to reverse the contraction being posted since April.

Neda attributed the strong start for manufacturing in 2016 to higher production of chemicals and food.

In January, chemical production rose 312.4 percent year-on-year in terms of volume and 309.6 percent in value. Food manufacturing volume and value, meanwhile, increased 20.2 percent and 19.1 percent, respectively, after one year of posting negative growth.