Weak global market demand pushes down Philippine exports by 24% in September

BalisacanWeak demand in the global market coupled with lower prices of major commodities pushed down the Philippine merchandise exports by 24.7 percent to US$4.4 billion in September 2015 from US$5.8 billion recorded in the same month last year.

The National Economic and Development Authority (NEDA) noted that this is the largest decline in export revenues since September 2011 when the supply-chain disruption in key Asian countries then caused a sharp decline in demand for electronics.

Economic Planning Secretary Arsenio Balisacan said this reflects a still sluggish external demand due to weak global economic activity and depressed commodity prices, which continue to strain exports growth.

“Signs of a possible rebound of the country’s merchandise exports in the fourth quarter are likely, owing to better prospects in Japan, US and the Eurozone,” said Secretary Balisacan.

Manufactured goods, which comprise about 87 percent of the Philippine total merchandise exports, posted a year-on-year decline of 23.6 percent in September 2015. It fell to US$3.8 billion from US$5.0 billion in the same period last year.

“This reflects the still weak global manufacturing sector, which can be traced to the sluggish final demand and ongoing inventory adjustments,” he said.

Export earnings from agro-based products declined by 29.0 percent in September—down to US$ 251.8 million from US$354.7 million in the same period last year. This was due to lower receipts from fruits and vegetables, coconut products, sugar products, and other agro-products.

Outward shipments of mineral products decreased year-on-year by 32.6 percent, while petroleum products declined by 83.7 percent to US$13.7 million in September 2015 from US$ 83.8 million in the same period last year.

“The government needs to further strengthen its efforts to diversify export markets in order to dissipate the impact of weak demand from a relatively concentrated market. Tapping the opportunities from the export of services such as outsourcing (IT-BPO) can in part compensate for the decline in goods exports,” said Balisacan.

Balisacan stressed the need of maximizing the potential of free trade agreements together with implementing programs that will address bottlenecks that affect the competitiveness of the export sector.

“We need to explore the country’s inclusion in the Trans Pacific Partnership (TPP) agreement, which can bring enormous benefits to participating countries in terms of trade,” said Balisacan, attributing Vietnam’s continuous growth in exports its ability to take advantage of trade opportunities.