Exports recovery seen at slow pace this year

Barcelona-based FocusEconomics expects the growth of the country’s merchandise exports to remain in single-digit this year amid soft global demand.

Massimo Bassetti, economist at FocusEconomics, said exports would expand just 3.7 percent this year before rising to 8.1 percent in 2018.

Data from the Philippine Statistics Authority (PSA) showed the country’s total merchandise exports inched up 4.4 percent to $56.23 billion last year.

The country’s exports grew only in the months of September with 5.1 percent, October with 7.6 percent, and December with 4.5 percent.

Bassetti said the country’s export earnings grew 22.5 percent to $5.13 billion in January mainly due to stronger demand from China, Singapore, the US, and Hong Kong, which more than offset weaker demand from Japan.

“January’s result reflected a broad-based expansion in all export categories, with exports of manufactured goods expanding at the fastest pace since December 2013 and exports of agro-based products growing by more than a third,” he said.

Outward shipments of manufactured goods increased 23.1 percent to $4.5 billion while exports of agro-based products jumped 33.7 percent to $386.5 million.

Exports of mineral products fell 29.6 percent to $ 102.33 million.

Electronic products account for the largest share of total export revenues with $2.36 billion followed by other manufacturers with $430.3 million, machinery and transport equipment ($352.4 million), articles of apparel and clothing accessories ($320.5 million), and coconut oil ($199.6 million).

Japan was the major destination of Philippine-made products with a share of 81.2 percent or $4.16 billion followed by the US with 16.5 percent or $847.1 million, Hong Kong with 10.3 percent or $529.64 million, and the People’s Republic of China with 9.8 percent or $501.2 million.

On the other hand, FocusEconomics sees the country’s trade deficit widening to $23.3 billion this year and to $25.7 billion in 2018.

Imports grew 9.1 percent to $7.44 billion in January. Inbound shipments of electronic products fell 16.2 percent to $ 1.86 billion while that of minerals, fuels, lubricants, and related materials surged 42.7 percent to $997.9 million.

Total imports went up 14.2 percent to $81.16 billion.