An overview of cranes loading ships with containers at the Manila South Harbor port taken in 2009. Philippine export earnings in April 2012 increased by 7.6 percent year on year to $4.636 billion, according data from the National Statistics Office. AFP/TED ALJIBE
MANILA, Philippines—The country’s exports recovered slightly in April, but a sharp drop in electronics shipments underscored the risk of weakening external demand facing the Philippines and the rest of Asia.
Exports, which account for about two-fifths of the country’s gross domestic product, rose 7.6 percent in April from a year earlier, as growth in other export items like garments and furniture offset a steep drop in the electronics and semiconductor shipments.
According to data from the National Statistics Office, exports in April registered $4.636 billion in receipts—marginally higher than the $4.306 billion reported in the same month last year.
Electronics, making up 35.3 percent of revenue in April, fell 23.8 percent to $1.635 billion, the first drop since December, with the value of shipments at a four-month low.
On a monthly basis, electronic products fell 27.8 percent from March, the NSO said. Semiconductors, which make up the bulk of electronics shipped out of the country, earned $1.228 billion, or 29.4 percent less than that of last year.
Because of the decline in electronics shipments, the Philippines may be hard-pressed to attain its exports growth target of 10 percent for the full year, economists said.
Month on month, exports rose 7.2 percent from the $4.323 billion reported in March.
Aggregate exports in the first four months grew 5.5 percent to $17.512 billion from the $16.592 billion posted in the same period in 2011, the NSO said.
“The trend from January shows the beginnings of a mild recovery from last year. The drop in electronics exports, however, can dampen export growth throughout the year if it will persist amid economic uncertainties in Europe and the US,” Cid L. Terosa of the University of Asia and the Pacific said in a text message.
Philippine exports, which contracted 6.9 percent last year, needs to rebound strongly in order to grow according to target, said Benjamin E. Diokno of the UP School of Economics.
“It will be difficult to see a continued improvement in exports if key electronics shipments remain lackluster,” said Eugene Leow, economist at DBS in Singapore.
Also, Santitarn Sathirathai of Credit Suisse said growth in electronics exports in the first quarter would likely fade in May-June, requiring domestic drivers, such as increased government spending, to take up the slack to protect growth.
Still, most exporters are optimistic that the 10-percent export growth target for the year can be attained, said Sergio Ortiz-Luis of the Philippine Exporters Confederation Inc.
The Semiconductors and Electronics Industries in the Philippines Inc. also expects electronics exports to grow 10 to 15 percent in 2012 after contracting more than 20 percent last year. But that estimate is in doubt given the lackluster performance of the sector so far this year.
Apparel and clothing accessories were the second-top export item in April. It was up 14.3 percent with $151.20 million in receipts. Woodcrafts and furniture followed with $137.55 million—up 7.5 percent.
Japan was the country’s top export destination in April, accounting for $738.79 million in receipts.
Other top buyers of Philippine products were the United States with $677.47 million, Korea with $658.43 million, and China with $497.34 million.
Total export receipts from the country’s top 10 markets in April amounted to $3.920 billion, or 84.6 percent of the total.—With a report from Reuters
Originally posted at 03:27 pm | Thursday, June 14, 2012