Philippine exports down 1.7% in July

The export figure surprised on the upside, registering just minimal contraction of 1.7% YoY (consensus: -6.8%) in July. Although electronics shipments remained anemic, declining by 21.3%, all other aspects of exports have been holding up well. Non- electronics manufacturing exports are up by 23.7%, while exports of primary goods such as agro, forest and mineral products are up by 61.3%. Structurally, the country has become less reliant on just electronics exports. In 2006, electronics make up over 60% of exports, but the figure is closer to 50% for the first seven months of the year.

However, further diversification into non-electronic products will take time. As such, a meaningful pickup in the total export figure can only come about through a turnaround in the global electronics demand. With non-electronics exports cushioning the drop in electronics exports, we project total merchandise export growth for the year to reach 2%.