MANILA - Philippine exports fell for the first time in three months in March as growth in electronics shipments slowed, casting doubt on the government's full-year target.
Exports contracted 1.2 percent from a year ago, with electronics and semiconductor shipments expanding 1.1 percent against double-digit annual growth in the previous month, the statistics office said on Thursday. The value of March exports stood at $4.3 billion, versus $4.35 billion in March last year.
Exports account for about two-fifths of the country's gross domestic product based on expenditure terms.
Electronics and semiconductor shipments, which dominate exports, rose by 1.1% to $2.26 billion in March from $2.23 billion during the same month last year. However, month-on-month, electronics were down by 3.1 percent from February figures.
Export earnings from semiconductors, which account for about three-fifths of exports, fell 3% to $1.67 billion in March.
Exports to United States, the country's top export destination in March, rose 9.6 percent from a year earlier. Exports to the Japan, the second-biggest market, fell 12.6 percent from a year earlier. Shipments to China, the third-biggest market, climbed 27.8 percent from a year ago.
Exports to Eastern Asia -- the top export destination by economic bloc, accounting for 46.8 percent of total shipments -- dropped 4.6 percent from a year earlier. Southeast Asia and the European Union were the second and third- biggest economic blocs.
Jose Vistan, research director of AB Capital Securities in Manila, said the March export figures were still positive considering that last year, exports declined in double-digits.
"Last month, we had double-digit growth. It's a step backwards but nonetheless better than last year when we were consistently seeing negative growth. I think it should improve, since when you talk about electronics, our major trading partners will be Japan, Singapore and the U.S. and the problems that are brewing right now are mostly in Europe, which is a small market for our exports," Vistan said.
Jun Neri, economist at the Bank of the Philippine Islands, said there should be more aggressive stimulus coming from both the fiscal and monetary authorities, as seen by the weakness in exports.
"Again, we would like to reiterate that for the June meeting of the BSP (Bangko Sentral ng Pilipinas), we think, there is still scope for another easing given this report for exports for March," he said.
Neri expects the first quarter export figuress to be lackluster.
"Our most recent estimate is around 4.4 percent which is by no means an exciting number. Now that the export number has validated a smaller contribution to growth this year versus the same time last year, we are even more convinced that growth will be somewhat unexciting for the first quarter and again should compel monetary and fiscal authorities to do something more aggressive," he added.
However, Neri warned there is a big risk likely to come from Europe, not only for exports but also remittances.
The government has forecast exports to grow 10 percent this year and imports to climb 15 percent, as manufacturers seek to shore up depleted inventories. - With Reuters