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MANILA - (UPDATE 2, 2:11 p.m.) Sales abroad of Philippine-made goods in August fell at their fastest pace this year mostly because of weak outward shipments of electronic products, the National Statistics Office said on Wednesday.
In a report, the NSO said merchandise export earnings dropped by 9 percent to $3.8 billion in August from $4.7 billion in the same month last year. This was the fastest contraction since the 19 percent in December last year.
The August figure brought the eight-month tally to $35.283 billion, up 5.4 percent from $33.479 billion in the same period of 2011.
Dragging the country's export earnings were electronics, the Philippines' top product, which contracted 14.9 percent year-on-year to $1.8 billion in August.
Trade Secretary Gregory L. Domingo said the 10-percent exports growth target for this year "obviously will not be reached" as electronics shipments continue their slump.
"We didn't anticipate the decline in electronics," Domingo said on the sidelines of the 38th Philippine Business Conference and Expo.
The Semiconductor and Electronics Industries in the Philippines Inc. last month said it may downscale its 5- to 7-percent growth target for 2012 as production of gadgets has slowed amid a global financial crisis.
Sales of woodcrafts and furniture rose 23.9 percent year-on-year to $205.65 million, while exports of metal components doubled to $138.55 million.
Japan emerged as the Philippines' top export market, with sales of $686.71 million, or 4.6 percent higher year-on-year. This was followed by Singapore at $561.99 million; US, $499.27 million; People’s Republic of China, $376.55 million; and Hong Kong, $306.97 million.
Other top ten markets for August were Republic of Korea, $246.13 million; Thailand, $218.54 million; Taiwan, $120.36 million; Netherlands, $119.03 million; and Germany, $113.67 million.
'Outlook for rest of year dim'
University of the Philippines economics professor Benjamin Diokno however sees no "sharp recovery in the short run," citing the slowdown in China and its lingering territorial dispute with the Philippines. Shipments to China in August fell 42 percent year-on-year.
The problem however doesn't stop with China, Diokno said, pointing to similar drops in exports to the US and the European Union - all major Philippine markets. Only shipments to Japan grew at 4.6 percent year-on-year.
"The outlook for the rest of the year is dim. The decline in electronics exports is a function of weak global demand. It could also be structural, meaning, the electronics product exports that Philippine factories produce may not be aligned with what the market needs," said the former budget secretary.
Diokno said the government target of 10 percent "is now unattainable," adding that exports should grow 19.3 percent in the remaining months of the year to make up for the weakness at end-August.
"But that's virtually impossible with the world economy turning slower and more uncertain. Government authorities should revise the exports growth target now and should strategize on how to do better next year," he said.
Domingo said a realistic full-year projection is 5- to 7- percent increase in total exports, as double-digit growth in non-electronics merchandise shipments will compensate for the low demand in electronics.
But exports next year are expected to recover as new electronics firms setting up shop in the country start production, he said.
"With the introduction of new products and new technologies next year...there's no where to go but up. We have already reached the bottom of the electronics [slump] cycle," he said.
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