Exports face challenges

MANILA, Philippines — The country’s exports will likely continue to face challenges, even with an expected recovery in demand from China, according to United Kingdom-based think tank Pantheon Macroeconomics.

“The misery in Philippine exports is set to continue even if demand from China recovers shortly,” Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, said in a report released yesterday.

He said the misery in Philippine exports deepened in July as it dropped year on year.

Data released by the Philippine Statistics Authority (PSA) last week showed the country’s exports declined by four percent to $6.21 billion in July from $6.49 billion in the same month last year.

This was the biggest drop in the country’s exports since the over four percent decline in January last year.

Of the top 10 major commodity groups, PSA said four registered lower exports value such as electronic products, cathodes and sections of cathodes, of refined copper, metal components and other mineral products.

Electronic products, the country’s biggest export, were down by 7.9 percent to $3.39 billion from $3.69 billion.

Semiconductor exports dipped by two percent to $2.57 billion from $2.62 billion.

Chanco said the recent drop in demand from China, which serves as the country’s second largest market for outbound shipments of goods next to the US, is partly to blame for the weak exports performance.

“Chinese imports from the Philippines have tanked by 26.4 percent since March, accounting for close to 40 percent of the ongoing freefall in total exports,” he said.

In July alone, Philippine exports to China dropped to $798.66 million this year from $1.05 billion.

“Reassuringly, our global growth assumptions see a pick-up in the Chinese economy from the fourth quarter,” Chanco said.

“But there is little that the Philippines can do about the state of semiconductor trade, which now looks set for a soft patch – at best – after years of international shortages,” he said.

For his part, Philippine Exporters Confederation Inc. president Sergio Ortiz-Luis Jr. said in a telephone interview that while exports dipped year-on-year in July, this is not expected to continue in the coming months.

“I don’t think it is a trend. I think more or less we can say there will be continued growth in exports, although not in the amount we would like to see it,” he said.

As for electronic exports, Semiconductor and Electronics Industries in the Philippines Foundation Inc. president Dan Lachica said in a Viber message the group is still looking to achieve its growth projection for the year.

“We don’t respond to monthly changes, unless there is a global perturbation like a pandemic, tsunami, etc. that affects our supply and/or delivery,” he said.

He said the country’s electronic exports for the January to July period are still two percent higher than last year.

“We still hope to make the projected 2022 growth of 10 percent,” he said.

Last year, the country’s electronics exports reached an all-time high of $45.92 billion.