May exports surge 37.3% to $4.24 billion

MANILA, Philippines - The country’s exports rose by 37.3 percent to $4.24 billion in May, the highest since September 2008 as demand for locally-made goods picked up after the global economic crisis, the National Statistics Office (NSO) reported yesterday.

Electronics shipments, which dominate exports, jumped 41 percent to $2.55 billion in May after a revised 30.2-percent rise in April, the government statistics office said.

The country’s shipment of electronics could still grow by 25 to 30 percent due to faltering global growth, the head of an industry group said.

“We are still hoping we could get it,” Ernie Santiago, president of the Semiconductor and Electronics Industries in the Philippines Inc., said of the 25 to 30 percent growth estimate.

Analysts said Philippine exports are likely to be hit as Europe’s sovereign debt problems and a flagging US economic recovery weakened demand in the West, with more recent data for other Asian economies already showing a softening in activity.

“May is a turning point for most Asian economies. We have seen across the board there was a slowdown in June. The latest numbers from Taiwan, or China show some slowdown in June and that is mainly because of the crisis in Europe,” said Simon Wong, economist at Standard Chartered Bank in Hong Kong. 

Exports account for about two-fifths of the country’s GDP based on expenditure terms.

From January to May, exports rose by 38.7 percent from a year ago.

“The numbers were much stronger than my expectations. We are also delighted to see that in terms of absolute levels it is $4 billion, so it is almost back to the level we saw in 2008 before the crisis, so these are encouraging developments,” said Wong.

Vishnu Varathan, an economist at the Singapore-based Forecast PTE, said the exports data is stronger than expected, and part of this seemed to be a bit of ‘catch-up’ from a soft platform in April.

“But it is a tad premature to get all excited given that leading indicators suggest that there could be a moderation in demand for chips and electronics on the whole. So it could, on the whole, be positive for exports recovery, but we probably need to realign expectations about rapid, or straight-line type of recoveries.”

He said Eurozone risks and signs of slowing demand from China, in terms of inputs, suggests that intra-regional demand could slow while global demand recovery remains tepid.

“So it could be a bumpy exports recovery story in the second half.”

Exports to the United States, the country’s top export destination in the month, rose 38.9 percent in May from a year earlier.     

Japan was the Philippines’ second-biggest market, with shipments rising 21.8 percent from a year earlier.

The third biggest market was Singapore, with shipments jumping an annual 105.7 percent.

The top destination by economic bloc was Easter Asia, accounting for 41.4 percent of total shipments. Exports to this region climbed 28 percent in May from a year earlier.

Southeast Asia and the European Union were the second and third top economic blocs.

Philippine exports are expected to grow 12 percent and imports to rise 18 percent in 2010.

In 2009, exports fell 21.9 percent, not as sharp as a forecast drop of 25 percent.

The main electronics industry group expects shipments to grow 20 percent or more this year on strong demand from China and India.