MANILA - After posting its lowest annual contraction since November 2008, Philippine merchandise exports slipped by more than a quarter in July.

Data from the National Statistics Office showed that export earnings fell 25.4% to $3.312 billion in July from $4.437 billion recorded in the same period last year. Compared to June's export earnings of $3.406 billion, the latest figure is lower by 2.8%.

In June, the country's exports fell 24.8%, the lowest annual drop since November last year. Since December 2008, exports have been declining at a range of 30% to 40%.

Shipments of electronic products, which accounted for 57.8% of total export revenues for the month, plunged 25.2% to $1.915 billion from $2.560 billion recorded in the same period last year. This was mainly caused by the 24.8% drop in semiconductor exports, which took the biggest share in electronics products.

Aside from electronics, other key exports of the Philippines include apparel and clothing accessories, coconut oil, woodcrafts and furniture, wiring sets, bananas, and metal components, among many others.

The United States remained the country's top export destination in July, accounting for $583.75 million or 17.6% of total export earnings for the month. The amount, however, is a 17.5% drop from $707.43 million recorded in the same month last year.

Japan placed second with a 16.6% share of export earnings at $550.19 million, followed by Netherlands (9.1%), Hong Kong (7.8%), and China (6.9%).

Earlier, the government said it may lower its full-year export growth forecast, following the sharp drop in global demand for Philippine goods in the past months. It has previously projected a 13% to 15% drop in export earnings this year versus the 2.86% slide in 2008.

"We have to revise the assumption to take into account weaker than anticipated performance of our trading partners," Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said in a congressional hearing on the proposed 2010 national budget last week.

Meanwhile, Guinigundo said the government's import growth target is also unlikely to be reached, given the 31.1% drop for the past 6 months. At present, the government is expecting the decline in import earnings at 8% to 12%.

Just like exports, Philippine merchandise imports posted the lowest annual contraction in June since October last year. Imports fell 22.8% to $4.108 billion in the said month, better than the 24.3% drop recorded in May.