Export growth slows in the Philippines

Manila: Philippine exports rose at the slowest pace in three months, missing economists’ estimates as the global slowdown and a strengthening peso crimped demand for electronics products.

Shipments abroad climbed 4.2 per cent from a year earlier to $4.31 billion (Dh15.8 billion) after a 19.7 per cent advance reported earlier for May, the National Statistics Office said in Manila today. The median of 13 estimates in a Bloomberg News survey was for a 12 per cent gain.

Faltering expansions in the US and China are curbing demand for goods from Taiwan to Thailand, with Singapore reporting today its economy shrank last quarter. Philippine exports are also damped by its peso, the top gainer against the US dollar this year in a basket of 11 Asian currencies tracked by Bloomberg, making the country’s goods more expensive.

“Signs of a global slowdown are worse than before and exports will be one of the soft spots for the whole year for most Asian nations,” Santitarn Sathirathai, a Singapore-based economist at Credit Suisse Group AG, said before the report. “The bigger risk is if the strengthening of the peso goes on for a while, as it will affect companies’ decisions of how much they want to produce in the Philippines.”

The peso fell 0.2 per cent to 41.833 per dollar as of 9.36am in Manila, according to Tullett Prebon Plc. The currency has gained about 5 per cent this year, outpacing peers, including the Malaysian ringgit and the Thai baht.

Growth forecast

The central bank cut its benchmark interest rate to a record-low 3.75 per cent last month to shield growth from a faltering global recovery. President Benigno Aquino aims to bolster expansion to as much as 7 per cent next year from an estimated 6 per cent this year.

The $225 billion economy, where exports made up about 20 per cent of gross domestic product last year, expanded 6.4 per cent in the first quarter, the fastest pace since 2010.