Exports seen to pick up as global economy recovers

MANILA, Philippines - The country’s exports of goods and services are expected to pick up in the coming months — reversing a sharp contraction since last year — as the global economy starts recovering from a crippling recession, Trade Secretary Peter Favila said.

He said there have been encouraging signs of an export-led recovery, pointing as an example food and furniture exporters who have reportedly started recovering the lost orders they have incurred at the height of the worldwide economic slowdown.

More importantly, Favila noted that the electronics industry appears to be gaining ground again. “This is good news because this is our number one export,” he said.

The National Economic and Development Authority (NEDA) earlier said merchandise exports are showing signs of recovery, posting a 15.9-percent growth in March this year from the previous month, as exports of all major commodity groups performed better than in February.

The economic planning agency also pointed out that while there was a 30.9-percent decline in exports shipments in March from a year ago, this was also an improvement from a 39-percent reduction in February, “indicating signs of the easing recession in trading countries.”

Exports earnings for March 2009 reached $2.9 billion compared to $2.5 billion in the previous month but lower than $4.2 billion in March 2008. On a cumulative basis, export revenues for the first quarter of 2009 amounted to $7.9 billion, 36.8 percent lower than the same period in 2008.

“The slight rebound in electronics in March compared to the previous month followed global trends wherein worldwide sales of semiconductors grew by 3.3 percent, as demand has somewhat stabilized, as reported by the Semiconductor Industry Association,” the NEDA report said.

NEDA added that market research company iSupply Inc. has observed that “the global semiconductor manufacturing industry is expected to take a breather in the second quarter as utilization rises by 60 percent”. The majority of the country’s electronic exports for the month of March went to China, the Netherlands, United States, Hong Kong and Japan.

The United States remained the biggest overseas market for Philippine goods with a 17.3 percent share in total export revenues in March. Japan was the second major destination of outbound shipments in March with a 15.4 percent share.

Other major export markets were China (10.6 percent), Hong Kong (9.4 percent), and the Netherlands (9.2 percent). The aggregated shipments to China, Hong Kong, and Taiwan accounted for 23.3 percent of the total merchandise exports in March 2009. 

Semiconductor devices, electronic data processing (EDP) machines, and garments made up 65 percent of the total shipments to the five biggest export markets in March 2009.

Favila said aside from the exports industry, other forecast drivers for growth in the second quarter are the tourism and the business process outsourcing (BPO) sectors.

The global crisis has adversely affected the investing climate in the Philippines as investment approvals for the first quarter of the year decreased 52 percent, Trade Undersecretary Elmer C. Hernandez said.