MANILA, Philippines - Merchandise exports fell for the first time in nearly two years in May due to supply chain disruptions after the natural disasters in Japan.
The National Statistics Office reported that the country shipped out $4.104 billion worth of goods in May, down 3.2% from a year ago, marking the first annual decline since October 2009 when the global economy was reeling from a financial crisis.
Electronic shipments, which dominate exports, dropped 26.2% from a year ago to $1.886 billion, and their fall in April was also larger than had been initially reported.
"Philippines' exports came in much weaker in May. This reflects the delayed impact of regional supply chain distortions after the Japan's earthquake, which resulted in weak demand of electronics intermediate goods," said Vincent Tsui, Standard Chartered Bank economist.
He added: "We see net exports will remain a drag on headline GDP growth until late third quarter, with latest reports suggest that capacity of Japan's electronic will be resumed by September."
Exports account for about two-fifths of the country's gross domestic product (GDP) based on expenditure terms.
The US was the country's top export market in May, with receipts rising 1.9% from a year earlier.
Exports to Japan, the second-biggest market, were up 1.2%, while shipments to China, the third-biggest, rose by an annual 25.9%.
Exports to Eastern Asia -- the top export destination by economic bloc accounting for 44.9%of total shipments -- rose 5% from a year earlier. Southeast Asia and the European Union were the second and third top economic blocs.
Exports are estimated to climb between 9% and 10% this year and 12% next year. Imports are expected to rise 17% to 18% in 2011, and 18% in 2012. Exports grew 34 % and imports 27% in 2010.
The Semiconductor and Electronics Industries in the Philippines is hopeful of hitting at least the lower end of its export growth target of 8% to 12% this year, but the head of the industry group has said it would be difficult to achieve.
The Philippines provides about 10% of the world's semiconductor manufacturing services, including for mobile phone chips and micro processors.
Other top Philippine exports include garments and accessories, wood furniture, vehicle parts, coconut oil, and tropical fruits.
The government had set a 7% to 8% economic growth target this year. Annual growth in the first quarter slowed to 4.9% from 6.1% in the fourth quarter, and 8.4% a year earlier. - With a report from Reuters