MANILA, Philippines – Merchandise trade in the country weakened 6.6 percent in July as exports extended its decline and imports contracted after a four-month upswing, the National Economic and Development Authority (NEDA) said yesterday.
Citing data from the Philippine Statistics Authority, NEDA said total revenue from trade fell to $11.4 billion last July from $12.2 billion a year earlier due to the 13 percent drop in exports and the 1.7 percent decline in imports.
Hit by sluggish demand caused by a still-recovering global economy, revenues from exports fell 13 percent in July to $4.67 billion from $5.37 billion in the same period in 2015. The decrease was attributed to lower outbound shipments of machinery and transport equipment; woodcraft and furniture; other mineral products; chemicals; electronic products; articles of apparel; and clothing accessories; ignition wiring set and other wiring sets used in vehicles, aircraft and ships; and metal components.
Exports have been on the downturn since July 2015.
NEDA said Philippine exports were hit by diminished demand from traditional markets such as Japan, China, Hong Kong and US.
“However, the outlook for the electronics industry is improving, particularly for semiconductors. We must take advantage of this and beef up the capacity of the electronics industry for production, research and development, and design to enable us to keep up with the imminent increase in demand,” said Socioeconomic Planning Secretary and NEDA director general Ernesto Pernia.
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The value of imports, on the other hand, fell 1.7 percent to $6.73 billion in July from 6.85 billion in the same period last year due to decreased inbound shipments of mineral fuels, lubricants and related materials; electronic products; and iron and steel.
NEDA noted the decline in imports was caused by diminished local demand for raw materials and intermediate goods.
“We must continue to upgrade and improve our industries to ensure their competitiveness and resiliency to shocks,” said Pernia.
He said the country must also continue to expand its presence in non-traditional markets to reduce its dependence on traditional markets.
Exports to the country’s non-traditional markets posted hefty increases, particularly in France and Mexico, which grew 59.2 percent and 22.4 percent, respectively.
Despite the slight decline in imports, Pernia said the growth in inbound shipments of capital goods and consumer goods signal good health for the economy.
“This only means that our domestic market is growing and healthy despite the weak global economy. We must support this growth by aggressively addressing logistical bottlenecks that hamper the flow of trade,” he said.
Almost all Asian countries, except for Vietnam, experienced declines in export performance, with Indonesia and Malaysia having negative growth rates of 12 percent and 10.2 percent, respectively.
