MANILA, Philippines - The country’s exports growth may be lower than the projected 10 percent for this year due to the weakening of the currencies of the major export markets of Europe and Japan, a trade official said.
“Exports may grow slower than initially expected because of the severe depreciation of European and Japanese currencies,” Trade Secretary Gregory Domingo told reporters yesterday.
The Department of Trade and Industry had earlier projected exports would grow by 10 percent this year.
Last year, the country’s merchandise exports were valued at $61.810 billion, up nine percent from the $56.698 billion posted in 2013.
Over the last 12 months, the Japanese yen has depreciated by 20 percent against the US dollar, while the euro has weakened by 35 percent versus the greenback with the world’s top economy showing signs of recovery.
Domingo said the depreciation of the euro and yen could cut exporters’ profit margins and dampen the growth of the country’s exports as Europe and Japan are among the biggest markets for outbound shipments of Philippine goods.
“That is a concern because it looks like the dollar will continue to appreciate,” Domingo added.
But while exports could post lower growth than initially expected for the year, he said the country’s economy is still expected to remain strong this year and even in the coming years.
This, as the country continues to benefit from the lower oil prices which leads to lower production costs and more money in consumer pockets.
“Because of the big reduction of oil prices, we are going to be one of the biggest beneficiaries in the world economically,” Domingo said.
Domingo had said the economy could grow faster than eight percent this year, if oil prices remain below $60/barrel.
The country’s higher gross domestic product per capita which is leading to more consumer spending, as well as stable wage rates, skilled work force and
growth in both the information technology-business process management and manufacturing sectors, are also seen to continue to drive economic growth.
The economy grew 6.1 percent last year after expanding 7.2 percent in 2013.