Exports drop in April for 1st time in 13 months

The country’s exports fell for the first time in 13 months in April as the economic fallout from the deadly SARS virus and the sluggish US economy slowed trade in the region, the National Statistics Office (NSO) reported yesterday.

The latest performance also raised doubts about the country’s ability to achieve the 10-percent export growth target for this year.

Based on the NSO report, exports declined by 1.8 percent to $2.698 billion in April from $2.749 billion in the same period last year. It was the first year-on-year fall after 12 consecutive monthly increases.

"It’s slow exports heading into the second quarter with SARS and a still sluggish US economy, which in no way is surprising," said David Fernandez, sovereign debt analyst at JP Morgan Chase in Singapore.

Exports, which make up about two-fifths of the overall economy, also shrank from a revised $3.093 billion in March.

Total exports in the first four months of the year, however, rose by 3.2 percent to $11.206 billion compared to the same period in 2002, the government statistics office said.

Sales to the US, which takes around 20 percent of Philippine exports, fell by 25.07 percent from a year earlier.

Exports to three big Asian markets (Japan, Singapore and Taiwan) dropped while shipments to Hong Kong, Malaysia, China and Thailand remained strong.

Electronics, the key export, fell by 2.2 percent to $1.856 billion in April.

The government statistics office said the fall was due to a drop in demand for data processing products, telecommunication devices and radar control and instrumentation. Electronics accounted for 68.6 percent of total exports in April.

Apparel and clothing accessories, the second top export earner also fell 8.9 percent to $140.42 million in April.

Earnings from petroleum products amounted to $37.95 million or a 25.7 percent increase from last year’s $30.20 million while that of other products manufactured from materials imported on consignment basis rose by 5.6 percent to $37.82 million.

"It’s quite surprising that the deceleration (in export growth) was quicker than expected," said DBS Bank analyst Chee Seng Wong, adding he did not foresee a slowdown until May.

However, Wong said the Philippine situation was in line with worldwide trends which point towards a slowdown in export growth in general.

"With the April figure, I am not confident that the 10 percent export growth target (of government) could still be met," Wong said, adding the country could post export growth of only four to five percent this year.

" A slowdown in exports will definitely adversely impact the Philippines’ economic growth prospects. I am quite pessimistic and I see GDP (gross domestic product) to cone in only at around 3.9 percent," he said.

The government estimates full year GDP growth at 4.2 percent to 5.2 percent. – With AFP