Exports growth decelerates to 0.8%

According to the Institute for Development and Econometric Analysis, Inc. latest NewsBriefs, for April 2014, merchandise exports earned a total of $4.54 billion, a mere 0.8percent increase from April 2013’s $4.51 billion. Earlier in February and March, exports grew by 11.6percent and 12.4percent respectively.

From the same period last year, earnings from the country’s top export, electronic products, contracted by 2.5percent at $1.82 billion largely due to the 16.4percent decline in semiconductors’ sales. Other manufactures, metal components and chemicals also fell. Earnings from processed food and beverages, other mineral products, machinery and transport equipment, wiring sets, clothing and apparel, woodcrafts and furniture all grew positively.

Arsenio Balisacan of NEDA doesn’t expect the export slowdown to persist. He notes the global economy’s gradual recovery will pick up the demand for the country’s exports. From January to April 2014, exports amounted to $18.86 billion, a 5.4percent increase in the same period last year. The government’s export growth goal for this year stands at 6percent. Japan continues to be the country’s top destination for exports.

Likewise per same published report, based on the April 2014 Labor Force Survey, employed Filipinos shot to 38.7 million as the employment rate rose to 93percent, up from 92.4percent a year ago. Moreover, the unemployment and underemployment rate dipped to 7percent and 18.2percent, improvements from the 7.6percent and 19.2percent posted in April 2013. While recognizing the gains, National Economic Development Authority’s (NEDA) Arsenio Balisacan contends that the quality of employment remains a concern. The recent survey excluded typhoon-hit Leyte.

Furthermore, according to IDEA, for March 2014, net foreign direct investments leapt to $476 million, almost 80% more than the $266 million recorded a year earlier. Overall, net FDI inflow for this year’s first quarter reached $1.85 billion, still short of the Bangko Sentral ng Pilipinas’ expected $2.6 billion for the whole year. The US, Japan, Singapore, Hong Kong and Taiwan were the top sources of FDIs.

Moreover, the government’s budget for 2015 stands at around P2.6 trillion, 15percent more than this year’s P2.265 trillion. According to Secretary Florencio Abad, spending on recovery, reconstruction, education, health and social protection may push it further. Despite delays in the budget process, a proposal is set to be submitted to the Congress by the end of July.

According to the researchers of IDEA, the Philippines will see a downward revision from the International Monetary Fund’s  2014 growth forecast due to the first quarter slowdown. Last March, the IMF projected the country to grow by 6.5percent this year based on the stimulus stemming from reconstruction efforts. Meanwhile, the World Bank maintains its 6.6percent growth forecast for the country. The government targets a growth of 6.5 - 7.5percent this 2014.

On the other hand, the Japan Credit Rating Agency affirms the BBB rating and stable outlook it conferred the Philippines last year, citing the country’s resilience, robust growth, stable political climate and healthy government finances. Challenges, however, remain, pointing to the country’s inadequate infrastructure, narrow tax base and less diversified financial sector. The JCRA expects the Philippines to grow faster than 6% this year.

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