Indicators brighten as economy continues strong run—Neda

Luis Leoncio

Apart from manufactures, total agro-based products also managed to sustain its robust growth in November 2014, with their exports value reaching $354.3 million, or up by 34.5 percent from $263.5 million in the same period last year.

Trade has become a major driver for the economy as merchandise exports grew by 19.7 percent in November, which for the third time in 2014 placed the Philippines as the highest export performer among East and Southeast Asian economies, according to the National Economic and Development Authority (Neda).

Meanwhile, the PSA’s Monthly Integrated Survey of Selected Industries (MISSI) report for November 2014 also showed an increase in the Volume of Production Index (VoPI) and Value of Production Index (VaPI), which grew by 8.1 percent and 7.5 percent, respectively, owing to a sustained broad-based growth in the manufacturing sector. The highest growth rates, in terms of volume and value, were recorded by printing, fabricated metal products and beverages.

“This strong performance of the exports sector during the period was largely driven by growth in manufactures, agro-based, and mineral products. An increased demand for Philippine-made products by Taiwan, China and the United States of America likewise boosted this expansion,” Neda Deputy Director-General and Officer in Charge Emmanuel F. Esguerra said.

“Aside from a robust export demand, the manufacturing sector’s higher growth for the period is attributed to increased domestic demand as well as improvement in the deliveries of goods.

With strong local consumption bolstered by the inflow of Overseas Filipino remittances as well as higher income resulting from the holiday season, the sector is expected to display a higher growth in the fourth quarter of 2014,” Esguerra said.

“The demand during the holiday season likely sustained exports and consumption growth until December 2014 which could potentially support a stronger fourth quarter GDP growth,” Esguerra added.

In exports, the Philippines outperformed Vietnam (10.8 percent), China (4.7 percent), Taiwan (3.7 percent), Hong Kong (2.8 percent), Thailand (-1.0 percent), South Korea (-2.1 percent), Malaysia (-2.3 percent), Singapore (-6.4 percent), Japan (-10.0 percent), and Indonesia (-14.6 percent).

Exports grew to $5.2 billion from $4.3 billion in November 2013. For the first 11 months of 2014, total exports rose by 10.0 percent to $56.9 billion from $51.7 billion in a comparable period last year.

“Manufactures continue to gain from positive developments in the global manufacturing sector, as better performance of both the electronics and non-electronics segments pushed exports to a higher growth path, “Esguerra said.

Exports receipts reached $4.4 billion, up from $3.7 billion a year ago. Most notably, total sales receipts from electronic products amounted to $2.5 billion in November 2014, higher by a hefty 27.0 percent compared to $2 billion in the same month of 2013.

Apart from manufactures, total agro-based products also managed to sustain its robust growth in November 2014, with their exports value reaching $354.3 million, or up by 34.5 percent from $263.5 million in the same period last year.

“This is attributed to the quadrupling of coconut oil exports, which more than doubled the export earnings from coconut products to $180 million from $68.6 million in November 2013,” Esguerra said.

Revenues from mineral products also grew by 5.6 percent to $195.9 million in November 2014 from $185.5 million in November 2013 due to increased shipments of copper metal.

The strong performance of these sectors moderated the lower export revenues registered by petroleum and forest products.

“However, slack demand by the start of 2015 may soften the demand for Philippines exports, in addition to the uncertainties still lingering in many big economies. Considering that exports of goods comprise around 40.7 percent of the country’s GDP, vulnerability to external shocks through the trade channel can pose downward risk to growth,” he added.

To mitigate the risks, Esguerra called for the government to intensify efforts in further diversifying export products and markets through continued export promotion and market access initiatives.

He noted that the enhancement of the Export Assistance Network (Exponet) can help provide start-up support for more exporters and further ease export-related procedures.

“For the manufacturing sector, adequate and appropriate infrastructure as well as facilitative regulatory environment is vital. The effective implementation of the Manufacturing Resurgence Program and faster implementation of infrastructure projects, including those under public-private partnerships, are essential. Upgrading our National Quality Infrastructure to be at par with international standards will not only improve the quality of our products but also open up more markets for our country’s exports,” Esguerra said.

“Of equal importance is the government’s expenditure program, which needs to regain traction in order to restore a vital policy lever to stabilize the economy should external risks materialize,” he added.

Japan remains the top destination of Philippines exports with a total value of $1.1 billion, accounting for 21.1 percent of our total revenues from merchandise exports during the period.

This is followed by the US with a total sales receipts amounting to $689.4 million or 13.3 percent share, and China with 12.4 percent.