Nomura Securities Co. Ltd. (NSC), a Japanese global financial firm, has predicted that the Philippines’ weak export performance will continue until the end of 2016. This is due to lower demand of the country’ products in the global market.
Euben Paracuelles, economist at Nomura, said they are expecting the country’s exports to remain weak over the remainder of 2016.
“We still expect exports to remain weak over the remainder of the year given the external backdrop and as electronics demand is likely to soften,” The Philippine Star reported Paracuelles as saying. He said this decline is also due to “post-election normalization of demand.”
On the other hand, Paracuelles said they are expecting a better outlook on Philippine imports considering the Duterte government’s focus on increasing infrastructure spending. He said the import growth will remain strong, backed by a solid domestic demand position.
The Philippine Statistics Authority (PSA) has reported a 13 percent decline in exports as of July 2016. The country’s export sales recorded only $4.673 billion (P222.21 billion) earnings compared to the $5.371 billion (P255.41 billion) recorded in July 2015. The PSA attributed the decrease to eight of the top ten major commodities in the country:
- Machinery and transport equipment: -36.8 percent
- Woodcrafts and furniture: -24.2 percent
- Other mineral products: -18.9 percent
- Chemicals: -18.7 percent
- Electronic products: -14.8 percent
- Articles of apparel and clothing accessories: -14.0 percent
- Ignition wiring set and other wiring sets used in vehicles, aircrafts and ships: -1.8 percent
- Metal components: -1.7 percent
Reacting to the export decline, Socioeconomic Planning Secretary Ernesto Pernia, in a press statement on the National Economic and Development Authority (NEDA) website, said the country has to continue with the upgrading and improvement of its industries. This is to ensure the competitiveness and resiliency in the worldwide market.
Pernia said the Philippines’ presence in non-traditional markets must continue to expand in order to lessen the dependence on traditional markets. He cited recent statistics from the PSA, which showed that for July 2016, exports to non-traditional markets posted substantial increase, especially in France and Mexico, which posted a growth of 59.2 percent and 22.4 percent, respectively.
What do you think of Nomura’s prediction that the country’s weak export performance will continue until the end of 2016? Let us know your thoughts in the comments section below.