Exports post 1st annual drop since October ‘09 MERCHANDISE EXPORTS in May contracted annually for the first time since October 2009, as electronics shipments plunged by more than a quarter -- a decline that industry officials and economists said placed full-year targets at risk.A total of $4.104 billion worth of goods were shipped out in May, 3.2% less than last year’s $4.241 billion, the National Statistics Office (NSO) reported on Tuesday. On a monthly basis, export receipts dropped 4.6% from April’s $4.302 billion, the NSO said. In comparison, exports grew 19.1% annually in April. Electronics shipments, which made up 46% of total export sales in May, plunged by 26.2% to $1.886 billion from $2.554 billion a year earlier. The decline was due largely to semiconductor exports, which fell 25.1% to $1.408 billion in May. Aside from electronics, exports of wiring sets and metal components also plunged in May, by 35.6% to $57.69 million and 21.9% to $53.42 million, respectively. But the contraction in these items was cushioned by increases in the second to fifth biggest products, namely: woodcrafts and furniture rose 98.1% to $186.33 million; apparel and clothing accessories, 6% to $159.93 million; coconut oil, 9% to $119.99 million; and petroleum products, five times up to $114.25 million. For the five months to May, total merchandise exports were still up, by 7.51% to $20.625 billion. The Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) said it would review its 8%-12% annual growth target for the year. “May was bad... this was primarily the effect of the Japan disaster as supply was disrupted... making our full-year 8-12% growth target unattainable at this time,” SEIPI President Ernesto B. Santiago said in a telephone interview yesterday. “A 5% growth is more doable and appropriate at the present time; but it is still up for review, seeing that we are still expecting a stronger performance in the second half.” Sergio R. Ortiz-Luis, Jr., president of the Philippine Exporters Confederation, Inc., said he would wait for a clearer trend. “Although there is a bit of difficulty in attaining our 10% growth target for 2011 due to problems in the Middle East and Japan, we are still keeping it until there is a clear trend that the decline will persist.” The government echoed the view, saying it would keep its 9%-10% full-year growth projection for now. “We will look at the next one to two months [to see] whether the trend holds up,” Socioeconomic Planning Secretary Cayetano W. Paderanga, Jr. said. “But, as of now, we will not change our growth target.” But University of the Philippines economist Benjamin E. Diokno said separately by phone that “the contraction was not a surprise, as world economic recovery is still weak and consumer demand for electronic products remains tepid, placing the 9%-10% export growth (target) at risk.” “Full-year growth would likely be around 5%-6%, since I expect export growth to be negative up to September,” Mr. Diokno added. Cid L. Terosa, senior economist at the University of Asia and the Pacific, was similarly cautious. “The export target of the government can still be attained if the semiconductor export market will show signs of improvement in the second half, which are [sic] normally the stronger periods in terms of sales and revenues.” The United States was the top export market in May, followed by Japan and China. |
U.S. Stocks Drop as Ireland Credit Rating Cut Smothers Rally A late rally in U.S. stocks faded, dragging the Standard & Poor’s 500 Index to a third straight loss, after Ireland’s downgrade to junk added to concern Europe is losing control of the credit crisis and overshadowed evidence the Federal Reserve hasn’t ruled out more stimulus.Semiconductor-related shares slumped, with Intel Corp. falling 1.8 percent after Novellus Systems Inc. (NVLS) forecast lower- than-estimated third-quarter earnings. Alcoa Inc. (AA) slipped 1.3 percent after second-quarter profit missed analyst estimates.Cisco Systems Inc. (CSCO) jumped 1.1 percent after two people familiar with the matter said it would announce job cuts. The S&P 500 dropped 0.4 percent to 1,313.64 at 4 p.m. in New York, after the index fluctuated between gains and losses throughout the day. The Dow Jones Industrial Average lost 58.88 points, or 0.5 percent, to 12,446.88. “There’s not a whole lot of conviction in the market,” said Jason Brady, a managing director at Thornburg Investment Management in Santa Fe, New Mexico, which oversees about $80 billion in assets. “Most investors are following Europe, and they are waiting to see if the earnings season will be good enough for them to get excited about equity prices. If that doesn’t happen, then you can add corporate performance to the ugly mix.” The benchmark index for U.S. equities gave up 2.5 percent during the previous two sessions, the most for the S&P 500 since March, as concern grew that Europe’s debt crisis will spread and American lawmakers failed to agree on cutting the deficit. The gauge had climbed 5.9 percent over the previous two weeks, its biggest gain since October 2009. The rebound in July came after the S&P 500 tumbled 3.2 percent in May and June amid disappointing economic data. Ireland Cut to Junk Rating by Moody’s Ireland joined Portugal and Greece as the third euro-area nation to have its credit rating reduced to below investment grade as European Union finance ministers struggle to contain the region’s sovereign debt crisis. Moody’s Investors Service cut Ireland to Ba1 from Baa3, citing the probability that Ireland will need additional official financing and for investors to share in losses before it can return to the private market to borrow. The outlook remains “negative,” Moody’s said in a statement yesterday. The euro fell to a four-month low against the dollar as European finance ministers failed to present a solution to the financial contagion that’s threatening to spread to Italy from Greece, Ireland and Portugal. In Spain, Finance Minister Elena Salgadosaid the nation might need to endure even deeper spending cuts in 2012 than those currently planned. Ireland, which had a top Aaa rating just over two years ago, has suffered after a real-estate boom collapsed, fueling bank bailouts and a surge in the country’s debt. “The downgrade underlines the need for something more radical in terms of a European solution,” said Austin Hughes, chief economist at KBC Ireland Plc in Dublin, which publishes a monthly index of consumer sentiment. “You really need Europe to come up with a solution rather than pushing it into the future. A solution needs to be found sooner than later.” Ireland’s government criticized the Moody’s downgrade, Dublin-based broadcaster RTE reported, citing a finance ministry spokesman. Ireland has met the targets so far under its bailout program and the downgrade is a “disappointing development,” the spokesman was cited as saying. |
Crude Oil Advances Most in Two Weeks as Europe Works to Ease Debt Crisis Oil climbed the most in two weeks in New York as European governments worked to halt the region’s credit crisis.Futures increased as Italian and Spanish bonds rose amid speculation the European Central Bank bought the debt of the euro-region’s most-indebted nations to stabilize markets and ease concern that the credit crisis is worsening. Crude also gained after failing to sustain a move below the 200-day moving average and on forecasts that U.S. supplies fell last week. “The European Union is looking for some type of solution, and that’s tided us over for now,” said Carl Larry, director of energy derivatives and research with Blue Ocean LLC in New York. “Nobody wants to see the European Union fail, so everyone’s looking for some signs of competence.” Crude for August delivery rose $2.28, or 2.4 percent, to settle at $97.43 a barrel on the New York Mercantile Exchange in the biggest one-day gain since June 28. Prices have risen 30 percent in the past year. Prices pared gains from the settlement and after the American Petroleum Institute reported at 4:30 p.m. that U.S. crude-oil stockpiles increased 2.34 million barrels to 359.4 million. August oil rose $1.68, or 1.8 percent, to $96.83 a barrel in electronic trading at 4:31 p.m. Brent oil for August settlement increased 51 cents, or 0.4 percent, to $117.75 a barrel on the ICE Futures Europe exchange inLondon. The spread between the benchmark New York and London contracts narrowed to $20.32 a barrel from $22.09 at the settlement yesterday. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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