The electronics industry, credited for nearly half of the Philippines’s total export receipts, has revised downward its target for exports growth this year, prompted by weaker demand from the country’s top markets abroad.
Dan C. Lachica, president of the Semiconductor and Electronics Industries in the Philippines Inc. (Seipi), informed reporters of the slower growth target following a general membership meeting of industry’s member-companies on Friday.
“We just had our board meeting before our GMM [general membership meeting]. The new forecast is 3 percent to 5 percent [growth], down from the initial 5-percent-to-7-percent projection at the start of the year. There is demand softening driven by events in China, Japan and the European Union [EU],” Lachica said in a text message.
Japan is the country’s top market for exports, comprising a 23.6-percent share in the value of shipments in May, while China is the fourth largest, taking a 10.8-percent share of the total $4.89 billion of exports in the same month. The EU accounts for 11.8 percent of Philippine export receipts.
Local exporters see the same scenario, as Sergio R. Ortiz-Luis, president of Philippine Exporters Confederation Inc. (PhilExport), echoed the Department of Trade and Industry’s dim outlook on export performance last Friday.
Outward merchandise shipments has registered a contraction of 17 percent in the May alone, leading to a 5-percent contraction year-to-date.
Data showed that manufactured-goods shipment registered its largest monthly decline for the year at 9.5 percent, down to $4.3 billion in May 2015 from $4.7 billion in the same period last year.
This can be attributed to lower revenues from semiconductors, machinery and transport equipment, wood
manufactures, electronic-data processing, and other manufactures.
The country’s top export, electronic products, also posted a contraction of 7.5 percent from $2.548 billion registered in May 2015.
Stakeholders said global events
affecting the stability of the top export markets, such as the uncertainty in the euro zone and the rebalancing of China’s economy, as the major causes of the foreseen paltry growth.
However, the National Economic and Development Authority, in a previous report, said the Philippines’s sluggish performance is not unique, as major trade-oriented economies in East and Southeast Asia also posted negative growth, with Vietnam as the sole exception.
On the recently inked Information Technology Agreement (ITA) deal of the World Trade Organization (WTO), Lachica noted that while benefits are seen, the over-all impact on the industry must not be exaggerated.
“The WTO ITA would lower trade barriers among the signatory countries, lower cost and enhance competitiveness…but its impact on electronics is not as big compared to other goods,” Lachica said in a separate message to reporters.