MANILA, Oct 10 (Reuters) - Philippine exports fell in August, posting the steepest drop and lowest value in eight months, the statistics office said on Wednesday, putting more pressure on the central bank to ease its policy rates further to support domestic growth.
Electronics and semiconductor shipments, which dominate exports, fell for the fifth straight month in August on weak demand from big markets like the United States and China.
The latest data brought exports in the first eight months of the year to $35.3 billion, up 5.4 percent from a year ago.
KEY POINTS Aug 2012 July 2012 Aug 2011 Exports $3.80 bln $4.73 bln $4.17 bln yr/yr change (pct) -9.0 6.0 -12.6 mth/mth change (pct) -19.7 9.6 -6.4 Electronics $1.77 bln $1.68 bln $2.07 bln yr/yr change (pct) -14.9 -25.6 -30.6 mth/mth change (pct) 5.4 -11.2 -8.0
NOTE: Some numbers for previous months have been revised.
- Electronics made up 46.5 percent of August export revenues, with woodcrafts and furnitures as the second biggest export item, comprising 5.4 percent of total.
- Exports to Japan, the country's top export destination in August, rose 4.6 percent from a year earlier.
- Exports to Singapore, the second-biggest market, up 63.6 percent from a year earlier.
- Shipments to the United States, the third-biggest market, down 18.7 percent from a year ago.
- Exports to Eastern Asia -- the top export destination by economic bloc, accounting for 45.8 percent of total shipments -- down 13.7 percent from a year earlier. Southeast Asia and the European Union were the second- and third- biggest economic blocs.
JUN NERI, ECONOMIST, BANK OF THE PHILIPPINE ISLANDS, MANILA
"It is the first time we fell below the $4 billion mark for total exports since December of last year. Over the two year period, it is a more than 21 percent contraction.
"We would probably qualify that August was the Habagat (monsoon) month and some degree of disruption must have taken place to affect the deliveries, so we would expect some improvement will take place in September.
"Nonetheless, it is a cause for concern and something has to mitigate the soft numbers we are getting from exports in the third quarter if we are to sustain the 5.5 to 6 percent growth trajectory of the Philippines.
"The government has to step up both its deficit spending and monetary policy stance to help sustain the strong performance in the first half.
"Aside from the headline drop in dollar receipts of 9 billion, if you account for the almost 6 percent appreciation of the peso year to date, that is going to hurt the exporters even more. Even more reason for the BSP (Bangko Sentral ng Pilipinas) to cut policy rates before the end of the year."
- Economic Planning Secretary Arsenio Balisacan has said rising orders from other countries and healthy demand for the Philippines' agricultural products should offset soft demand from traditional markets for its main semiconductor products.
- The economic planning chief has said the country will likely meet the high-end of its 5 to 6 percent growth as strong domestic demand will likely compensate for the weakness in exports.
- The Semiconductors and Electronics Industries in the Philippines Inc cut its export growth forecast this year to 5-7 percent from 10-15 percent on slowing demand, although the group is hopeful of a rebound in orders in the second half after current inventory cuts stabilise.
- The government has forecast export growth of 10 percent this year. It has trimmed its import growth forecast to 12 percent from 15 percent as manufacturers feel the brunt of the global economic slowdown.
- The Philippine central bank kept its key policy rate last month, but economists believe that with inflation under control, it may ease policy further before the year ends to support the economy and contain the peso's strength.
- The Philippines provides about 10 percent of the world's semiconductor manufacturing services, including for mobile phone chips and micro processors. Semiconductors account for about three-fifths of exports.
- Other top exports include garments and accessories, wood furniture, vehicle parts, coconut oil, and tropical fruits.
- National Statistics Office website
(Reporting by Erik Dela Cruz; Editing by Rosemarie Francisco)
Keywords: PHILIPPINES ECONOMY/EXPORTS