A still fragile global economy continued to dampen demand for Philippine exports, which declined 4.1% in April despite strong sales growth for manufactures, according to the National Economic and Development Authority (NEDA).
The Philippine Statistics Authority reported that total export earnings reached US$4.3 billion in April 2016, lower than the US$4.4 billion recorded in the same month last year.
“The country’s export performance remains subdued by external conditions but this period is also an improvement from last month’s year-on-year drop of 15.1 percent,” Socioeconomic Planning Secretary Dr Emmanuel F. Esguerra said in a statement.
The Cabinet official noted that “the recovery in the sales of manufactured products, which grew by 2.1 percent in April 2016, is worth noting.”
During the period, manufactured products were the country’s largest export commodity group, comprising 90.9% of total merchandise exports.
Meanwhile, agro-based, mineral, forest, and petroleum products recorded a revenue decline, as the weak global economy continued to pull down demand from some of the country’s major trading partners such as the United States and China. This tempered solid gains from exports to Singapore and Japan, NEDA noted.
“The slow pace of global economic recovery has negatively affected trade in most countries. Given this situation, the country’s export sector will continue to remain sluggish in the coming months as manufactured exports, such as electronics, are not expected to significantly contribute to exports growth,” Esguerra, who is also NEDA director-general, said.
Significant losses in crops due to El Niño also contributed to the weaker sales of agro-based products.
Month-on-month, growth of total exports value was also down 7.7% from $4.6 billion in March. For the first four months of 2016, export receipts amounted to $17.4 billion, 7.3% lower than the $18.7 billion registered last year.
To overcome the downward trend, Esguerra reiterated his call for a renewed strategy of improving export products and diversifying to non-traditional export markets that have high demand. “The government should enhance its support for emerging export products to maximize any opportunity to sell Philippine-made merchandise. The quality should also be continuously upgraded to deepen access to existing markets and diversify into new ones,” Esguerra said.
“It is critical to promote quality consciousness among local producers and establish a strong national quality infrastructure to ensure quality and safety of products, protect consumers and the environment, boost the competitiveness of industries, and allow the Philippines to access international markets,” he added.
Esguerra also noted the uptick in outward sales to the ASEAN region during the period, especially to Cambodia, Lao PDR, Myanmar and Vietnam.
He said this needs to be sustained by maximizing the benefits and opportunities from the country’s trade agreements in the region.
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