Despite the continuous slide in Philippine export earnings, economists remain sanguine there’s room for improvement.
On Friday the Philippine Statistics Authority (PSA) said export earnings posted a contraction of 4.1 percent in April this year to $4.254 billion, from $4.434-billion recorded value in April 2015.
Export receipts growth between January and April 2016 posted a 7.3-percent decrease from $18.738 billion in 2015 to $17.363 billion in the same period of 2016.
“I expect exports to do better in the third and fourth quarters. There must be clear indications of economic strength in our major export markets [for this to happen],” University of Asia and the Pacific (UA&P) School of Economics Dean Cid L. Terosa told the BusinessMirror. “Exporters [for their part] need to scale up, create markets, integrate and innovate,” he added.
First Metro Investment Corp.-UA&P Capital Markets Research’s Victor A. Abola said major markets, such as the United States, are expected to post better growth in the second half of 2016. Abola said the growth of the US economy will be the major determinant of export growth since a growth in their economy will be an indicator of global demand.
He said the country can see improvement in export earnings around July this year, but positive growth numbers would start in September.
“We’ll see better performance in the second half, particularly in the last four months,” Abola said.
“Better growth starts in July, but you might have some bumps, but definitely in September you’ll see positive growth all the way,” he added.
To boost export growth, National Economic and Development Authority (Neda) Director General Emmanuel F. Esguerra said there is a need to improve export products and diversify toward nontraditional export markets with high demand.
Esguerra also noted the uptick in outward sales to the Asean region during the period, especially to the CLMV (Cambodia, Lao PDR, Myanmar and Vietnam) countries.
This uptick, he added, needs to be sustained by maximizing the benefits and opportunities from the country’s trade agreements in the region.
“It is critical to promote quality consciousness, among local producers, and establish a strong national quality infrastructure to ensure quality and safety of products; protect consumers and the environment; boost the competitiveness of industries; and allow the Philippines to access international markets,” Esguerra said.
The country’s total export receipts from the country’s top 10 market destinations for the month of April 2016 was valued at $3.574 billion, or 84-percent share of the total export receipts.
The top 3 export markets in April were Japan at 20 percent; United States, 16.6 percent; and Hong Kong, 11.1 percent. Exports to Japan reached $850.72 million in April. It increased by 3.2 percent, from $824.26 billion recorded in the same month a year ago.
Shipments to the US were valued at $704.64 million in April. It recorded a decrease of 0.8 percent, from $710.44 million in same month last year.
The country’s exports to Hong Kong amounted to $472.01 million. It fell by 0.4 percent, from $474.04 million recorded in the same month last year.