“We must continue to upgrade and improve our industries to ensure their competitiveness and resiliency to shocks,” said Socioeconomic Planning Secretary Ernesto M. Pernia.
The decline in exports is due to the decrease in demand for Philippine products from traditional markets such as Japan, China, Hong Kong, and USA. Meanwhile, the decline in imports is a result of the decrease in local demand for raw materials and intermediate goods (13.6%), as well as mineral fuel, lubricants (26.3%).
“We must continue to expand our presence in non-traditional markets to reduce our dependency on traditional markets,” the Cabinet official said.
Conversely, exports to the country’s non-traditional markets posted hefty increases, particularly in France and Mexico, which grew by 59.2 percent and 22.4 percent respectively. Meanwhile, imports from Japan, China, Hong Kong and Singapore increased in July 2015.
Also, strong sales in coconut products, particularly in coconut oil and desiccated coconut, and agro-based products eased to 0.6 percent in July 2016, a relief from the four-month long double-digit decline since March.
However, Pernia warned of the looming threat of La Niña, saying that the government must ensure that policies that improve and strengthen the resiliency of agricultural communities are passed swiftly.
“We must prepare ahead and improve infrastructure and weather facilities. We must tap agriculture research and extension facilities to better equip the farmers to cope with increasing unpredictable weather conditions,” he said.
On the other hand, export of manufactured goods declined by 13.0 percent to US$4.0 billion in July 2016, the steepest decline for the last ten months since September 2015.
“However, the outlook for the electronics industry is improving, particularly for semiconductors. We must take advantage of this and beef up the capacity of the electronics industry for production, research and development, and design to enable us to keep up with the imminent increase in demand,” the Cabinet official said.
On the other hand, imports of capital goods grew by 23.1 percent to US$ 2.3 billion while consumer goods grew by 8.3 percent to US$ 1.1 billion in July 2016.
“This only means that our domestic market is growing and healthy despite the weak global economy. We must support this growth by aggressively addressing logistical bottlenecks that hamper the flow of trade,” said Pernia.
Almost all Asian countries, except for Vietnam (5.1%), experienced declines in export performance with Indonesia (-12.0%) and Malaysia (-10.2%) joining the Philippines with double-digit negative growth rates for July 2016.
In contrast, all Asian countries experienced declines in import payments with the Philippines remaining at the helm despite declining by 1.7 percent, followed by Vietnam with 2.2 percent.□