As more economies started easing up on their trade restrictions in July, the declining trend in Philippine (PH) Merchandise Exports also eased up. July 2020 exports posted only a single-digit decrease of 9.6% year-on-year (YOY), a welcome improvement from the revised figure of 12.5% YOY decline last month, preliminary July 2020 Philippine Statistics Authority (PSA) data showed.
In value terms, this translates to USD5.7B from USD6.3B in the same period last year. This slightly improved the year-to-date (YTD) figure for a decline to 16.4% compared to the 17.8% decline posted during the first half of the year.
In terms of value, merchandise exports only reached US$34.1B for the first seven months of 2020 compared to the US$40.8B posted during the same period last year. Consistent with its historical performance, Electronics accounted for over half of the country’s total merchandise exports (57%) in the review period, while Non-electronics made up the remaining 43%.
While negative growth rates in exports to the top 10 PH markets were still the norm, there was some improvement as the 11.7% YOY decline posted last month decelerated to a lower figure of 7.4% YOY, indicating that more PH products were absorbed by the major trading partners of the country in the first seven months compared to the first semester.
“The sharp fall in April 2020 YOY performance, at the onset of the pandemic where most economies went on lockdown, was dramatically halted from further plummeting and rebounded in the next 3 months, to bring the exports value much closer to the same level of trade last year,” said Department of Trade and Industry-Export Marketing Bureau (DTI-EMB) Director Senen Perlada.
“The sustained slowdown in the rates of decline in both YOY and YTD terms provides for cautious optimism that merchandise exports are on the path to recovery. However, the reversion of major exporting areas of the country to MECQ in early August, with its attendant challenges in availability transportation, health protocols for workers, and other supply chain disruptions could be a cause for concern for merchandise export performance for August and the rest of the year,” he continued.
According to the World Trade Organization “the COVID‑19 pandemic and associated containment efforts intensified in the second half of March. Strict social distancing measures and restrictions on travel and transport were fully in effect in most countries throughout April and May, and are now increasingly being relaxed. These developments are reflected in a variety of economic indicators which, taken together, suggest trade may have possibly bottomed out in the second quarter of 2020.”
In terms of market share, the top 10 PH export destinations in the review period absorbed over 87% of the country’s merchandise goods.
As in the past, almost 60% of the total goods exports in the top 10 PH markets went to the usual group of three economies, namely the combined markets of China and Hong Kong (29.0%), Japan (15.8%), and the US (14.8%).
Exports of Electronics went down sharply by 13.0% in the first seven months of the year to USD19.4B from USD22.4B in the same period in 2019. The Top 5 Electronics exports in terms of value continued to contribute over 96% share in the total YTD industry value and over 55% in the total PH exports value.
Semiconductors still get the lion share of Electronics exports at 77.2% and 44.0% of total PH merchandise exports. However, its total exports went down by 8.8% to USD15.0B in Jan-July 2020 from USD16.4B in the same period in 2019.
Non-Electronics’ export sales continued to decline in the first seven months by 20.4% to USD14.7B from USD18.5B in the same period last year. The biggest contributors to the decline in terms of the difference in value were Other Electronics (USD813.3M); Machinery and Equipment, USD755.1M); Chemicals, (USD270.0M); Garments, (USD220.4M); and Coconut Products, (USD148.8M).
On the other hand, the top performers in the current review period in terms of the difference in value were: Petroleum Products, USD70.5M; and Textile Yarns/Fabrics, where surgical masks fall under, USD47.7M.
Only 5 countries – Vietnam, China, Singapore, Malaysia, Taiwan — have recorded positive YOY growth rates among 11 trade-oriented Asian Economies, and the rest of the countries suffered declines in terms of YOY export performance. However, 3 countries – Singapore, Vietnam, Taiwan — have recorded positive YTD export performance.
PH continued to decline, although decelerating, which helped to get it back to its single-digit decline in YOY export terms. PH was gradually recovering from its 9th place the previous month to 8th place now in terms of YOY export growth. PH got the lowest rank in terms of YTD trade performance and registered a double-digit decline. However, it’s worth noting that the decline was lower than the previous month’s.