I Told You So Moment: Philippine Exports Hit in August

From Wall Street Journal, 

The Philippines' August exports fell 9% from a year earlier, making the country the latest in Asia to take a hit from sluggish demand from Europe and the U.S.

The decline, to $3.798 billion, was the largest percentage drop since December. The National Statistics Office said August was the first month since December that export value dropped below $4 billion.

Electronics shipments, the country's biggest export category, fell 14.9% from a year earlier to $1.765 billion, though they rose 5.4% from July.

Shipments of clothing, coconut oil and bananas also saw double-digit declines.

Exports for the first eight months of 2012 rose 5.4% to $35.28 billion, lagging the pace needed to meet the government's full-year growth target of 10%.

The country's central bank said it would consider the August export data when it reviews its monetary policy later this month, but economists doubt the figures will prompt an immediate rate cut.

Here is what I wrote last July, 

Again while it is true that Asia has been less dependent on the West, there is no guarantee that other sectors will not be affected from slomo diffusing or spreading of the global debt crisis.

A slowdown in electronic exports incidentally constitutes about half of Philippine exports

So those dreaming of immunity from a global slowdown will likely be refuted.

Bottom line: The contagion risk is real.

Sweet vindication especially against the clueless mainstream who then had been predicting economic paradise from the populist charade of supposed political salvation.

Oh by the way, contra policy signaling being transmitted by monetary authorities, slashing interest rates (or even doing local version of QE) will do no magic for exports. 

What this does instead is to fuel rampant speculations and malinvestments.

(chart from tradingeconomics.com)

Proof?

Philippine asset markets  (Peso Stocks), like her global counterparts, have been defying gravity—yeah we live in a parallel universe—where asset prices and the real economy seem to be moving in opposite directions.