Weak exports likely to linger until 2017

CEBU, Philippines - The continued weak exports growth might flow over through next year, according to an official from the Philippine Exporters Confederation Inc.-Cebu.

Philexport-Cebu Executive Director Fred Escalona told The FREEMAN that the local export sector is expecting "a lower turnover this year and negative sentiment might flow over in 2017."

"All exporting countries are experiencing the same global slowdown," Escalona said.

When asked whether the export sector is seeing a recovery in the medium-term, Escalona said that it's difficult to predict as of now.

"But we are hopeful," the Philexport official noted.

According to Escalona, it's likely that the export industry will see a double-digit drop again for 2016.

Last year, exports in Central Visayas region saw a double-digit drop due to weak global trade and slow demand from the region's trading partners.

Data showed the region's export earnings last year totaled US$4.2 billion (P192 billion), down 22 percent from US$5.4 billion in 2014.

Subdued  growth

Earlier, National Economic and Development Authority Regional Head Efren Carreon said the region's exports growth remained subdued for the first half of the year, although he did not provide official figures.

The weak export growth is expected to continue to affect the performance of the regional economy this year

The CV economy grew at a slower pace last year by 4.8 percent due to the difficult external environment that affected demand for the region's exports, the onset of El Niño and the challenges in government spending during the year.

In general, Philippine exports had been falling for 15th consecutive month in June, pulled down by weak demand from major export markets.

From January to June, the country's exports registered a 7.5 percent drop to $26.8 billion from $29 billion in the same period last year.

NEDA said with the slow global economic recovery, the country identify non-traditional markets such as in Europe and within the Southeast Asian region to reduce the external shocks from times of weak demand from traditional market.

'Diversify  markets'

The Philippine export industry, in general, is largely dependent on few markets, including Japan, US, China, Hong Kong and Singapore.

Trading with other Southeast Asian economies, except Thailand and Malaysia, is still limited despite the growing regional integration.

Escalona shared that Philexport-Cebu is training its member-exporters to tap non-traditional markets.

Exporters have also been urged to cater the domestic market given the robust domestic demand.

NEDA had said keeping government spending on track is crucial to ensure that domestic demand continues to provide a cushion to mitigate the impact of the country's weak exports growth.

The slow pace of global economic recovery has negatively affected trade in most countries, adding negative sentiment the sector will continue to remain sluggish in the coming months. (FREEMAN)