Exports shrank 4.1 percent in April from a year ago, the biggest drop in two years, as the fragile global economy led to lower demand for the country’s agriculture, mineral and petroleum products, data from the Philippine Statistics Authority show.
The PSA said Wednesday merchandise exports amounted to $4.38 billion in April, down from $4.56 billion recorded a year ago. It followed a 2.1-percent gain in March, when shipments reached $5.38 billion.
Data showed the 4.1-percent contraction in April was the sharpest since February 2013, when exports fell 5.8 percent.
“The decline is partly reflective of fragile global economic conditions, as most trade-oriented economies in East and Southeast Asia also registered negative export performance in April 2015, with only Vietnam in positive territory. Weaker demand conditions in some of our major trading partners, particularly China, were seen,” said Economic Planning Secretary Arsenio Balisacan.
HSBC economist Trinh Nguyen said while the Philippines was not an export-driven economy, the decline in shipments was still worrying.
“In Q1 2015, the drastic slowdown of real goods and services exports dragged GDP growth trajectory downward. While imports also decelerated to 4.6 percent y-o-y from 9.9 percent in Q4 2014, the sharp downturn in exports subtracted almost 2 ppts from the 5.2 percent y-o-y GDP growth rate. April’s disappointing exports, coupled with expectations that external demand conditions will remain tepid, suggest that net exports are unlikely to contribute to growth in Q2,” Nguyen said.
She said Philippine exports were weakened by eroding costs and structural competitiveness.
The Trade Department said it was keeping the 10-percent export growth forecast in 2015 despite the 1.2-percent drop in aggregate exports in the first five months.
“We’re keeping the 10-percent [growth]. With electronics [exports] up and continue rising and the strong showing of services, we’re confident that exports will post as much as 10-percent growth,” Trade undersecretary for investment promotions Ponciano Manalo said at the sidelines of the ongoing Franchise Asia 2015 at the SMX Convention Hall in Pasay City.
Data showed the outbound shipment of petroleum products plummeted 94.8 percent to $2.7 million in April 2015 from $52 million in the same period last year.
“Falling crude oil prices in the international market continue to partly affect the country’s exports as reflected in the year-on-year declines in the volume of petroleum exports to Singapore, Malaysia, Thailand, and Cambodia,” Balisacan said.
Exports of mineral products decreased 18.2 percent in April to $260.3 million from $318 million in April 2014, due to lower earnings of copper concentrates and iron ore agglomerates.
Shipments of agro-based products dropped 33.1 percent to $231 million in April from $345 million a year earlier, as sharp contractions were recorded in fruits and vegetables.