Philippine exports decline.

This is from Malaya.

While exports declined less in November than October the decline of 12 per cent still shows that the global slump is having a significant effect in the Philippines. Even so total yearly growth for 2008 is positive but much below that of 2007.


Slump in exports eases to 12%NSO reports electronics exports contracted by 4.79% or $1.3B for Jan. - November
Exports fell 12 percent last November after falling a revised 15 percent in October according to the National Statistics Office.
Shipments of electronics products which make up 66 percent of
the country’s exports contracted 17 percent in November after falling 18.9 percent last October.
For the first 11 months of the year, total exports, however managed to inch up by 0.76 percent.
Electronics exports for the first 11 months contracted by 4.79 percent, a big $1.3 billion reduction from $28.5 billion to $27.17 billion.
Another big loser was garments exports which contracted a higher percentage of almost 16 percent but less than the $1.3 billion loss of electronics at $300 million from $2.1 billion to $1.79 billion.
Other big losers were iron ore exports and fresh bananas.
The government has revised its 2008 exports target to growth of 2-4 percent from 5 percent, slower than 2007’s 6 percent rise.
Besides electronics, which are largely assembled from imported parts, other key Philippine exports include garments and accessories, vehicle parts, coconut oil, tropical fruit and wood furniture
Export of electronics had been on a four-month slide from the August contraction of 2.8 percent.
Of total electronic products exported, semiconductors posted the biggest decline of $1.61 billion which was offset by the rise in exports of parts used in telecommunications equipment from $382 million last year to $583 million this year.
Another gainer in electronics export is automotive electronics which rose from $554 million to $764 million.
Not all is lost in exports, there were products doing better namely tuna exports which rose from $182 million to $354 million or 94 percent rise.
Another big gainer is gold followed by desiccated coconut.

Philippines exports weaker because of high dollar, energy prices

This is from the Inquirer. With inputs being very high priced Philippine exports are bound to be less competitive. With the dollar weaker, prices of Philippine products in U.S. markets will be higher. However, other currencies are also much higher so this may partly compensate. At least Philippine consumers will enjoy lower prices for products imported from the U.S.

2008 exports seen weaker on US concerns, high energy prices
Thomson FinancialFirst Posted 17:26:00 01/29/2008
MANILA, Philippines -- Merchandise exports growth this year is likely to be weaker on a further slowdown in the US economy, high energy prices and the continued strengthening of the peso, an industry leader said Tuesday.
"Exports contributed very little to national economic growth last year, and we are seeing very little growth, if any for 2008," Sergio Ortiz-Luis, president of the Philippine Exporters Confederation or Philexport said at an energy summit here.
In the first 11 months of last year, exports rose just 4.8 percent from a year before. The reduced target for the whole year is 8.0 percent.
Electronics exports, which accounted for 61.3 percent of total export earnings in November, fell to $2.42 billion from $2.54 billion a year earlier.
The Semiconductor and Electronics Industries in the Philippines or SEIPI said it is also bracing for a difficult year.
"We are anticipating demand to be weak in the first half of the year. We are just hoping that growth will, at best, be flat and won't get any worse or be negative," said SEIPI executive director Ernesto Santiago.
With exports last year weighed down by "a triple whammy of high electric rates, historic oil prices and a strong peso, nine percent of the country's exporters closed shop last year," said Luis of Philexport.
"While a recession in the US will be a drag on exports in the short-term, it is the high cost of power, triggered by a surge in crude oil prices, that has drastically eroded the viability of the exports sector," said Luis.
Electricity expenses make up about 15 percent of production costs of export manufacturing enterprises in the Philippines.
World oil prices were slightly higher Tuesday in Asian trade, hovering near $90 in a market focused on the fate of the US economy.
Luis said the Philippines has one of the highest electricity rates in Asia, next only to Japan.
The country's two biggest groups of exporters have been urging the Philippine government to take more concrete steps to make electricity prices more competitive.
"We hope that the government can seriously consider the exporter's plight. There is a need to address the issues of electric power quality and security, in addition to developing and tapping alternative or renewable energy sources," said Luis.
($1 = P40.69)

Philippines: Flat Export Growth Forecast for 2008

Flat export growth forecast for 2008
This is from the Manila Tribune. While the high peso makes imports cheaper, it obviously creates difficulties for exporters. Also, the high peso means that US dollar earnings sent to the Philippines from abroad purchase fewer pesos. The Arroyo government is obviously overly optimistic in its predictions for export growth. That is not too surprising!

12/27/2007

With the peso strength expected to persist until next year and at the same time the specter of recession in the United States looms large, local firms project exports growth to be flat through next year.

The best that exporters can hope for is a 5-percent growth next year, according to Philippine Exporters Confederation president Sergio Ortiz-Luis Jr.

“We could not commit to the nine percent projection of government. Most of our members are already saying their exports may even decline due to the strengthening peso. They are also scared of a recession in the United States,” Ortiz-Luis added.

For this year, exporters said growth will only be four to 6 percent this year due to the rampaging peso, much lower than the government’s six to seven percent forecast.

He said even the call center industry is now paring down its projected income of $10 billion by 2015 and its projected manpower needs of 1 million by 2010. That sector contributed $3.5 billion to the $50 billion in total dollar revenues from goods and services exports last year.

Garments magnate and Philippine Chamber of Commerce and Industry chairman Donald Dee was equally pessimistic on the performance of the garments industry, the second biggest export product of the country.

“Garments exports already contracted by 12.29 percent from January to October this year. If the peso continues to appreciate and the US economy declines while costs are going up, we expect to be hit even harder by next year,” Dee said.

He said the hoped increase in exports to the recovering economy of Japan may even be dashed if the Philippine Senate rejects the Japan-Philippines Economic Partnership Agreement.

Semiconductor and Electronics Industries of the Philippines Inc. president Ernesto Santiago, said at worst, the nation’s top export industry may stay flat next year.

This was the revised projection of industry players in their last meeting, he said.

“At best, if the US can prevent a recession in the second half of next year, our industry may post a 5-percent growth,” Santiago said.

Semiconductor and electronics make up 60 percent of exports. Its most optimistic projection of 5 percent growth falls short of the 9-percent projection of the government.

Although semiconductor grew by 6.42 percent in the first 10 months of this year, the electronics segment of the industry declined by 30.86 percent this year partly due to the strong peso and partly due to the high cost of electric power, Santiago added.

For his part, Philippine Food Processors and Exporters (Philfoodex) president Bobby Amores doubted government statistics showing that food export was one of the few industries that grew this year.

“I don’t know where the government got its figures. What I know is that mango exports declined by 30 percent this year,” Amores said.

Food exporters are making shipments at a loss just to keep their buyers from ordering from other suppliers but they cannot sustain that without any relief, he said.

Gerardo Sicat, leader of the handicrafts industry, pointed out that the hard-hit handicrafts sector already declined by 1.53 percent this year due to the rejection of orders. There is no hope for growth from that end this coming year, he said.

George Barcelon, head of the footwear export industry, said his members have stopped giving out quotations to its buyers because of the continued decline of the dollar’s value against the peso.

On the whole, the export leaders expressed pessimism they can aim for the same export growth target that government officials have dreamt of.

“Six percent (growth) is still possible, I think within 4 to 6 percent. But next year, we have no idea yet, we have still to look at what’s happening. There are many ‘ifs’ to consider,” Ortiz-Luis Jr. said.

Ortiz-Luis said even if the November and December exports figures increased, these will not make a significant dent in improving total exports revenues for 2007.

The cumulative exports for the first 10 months only averaged 5.4 percent despite the double-digit 10.5-percent growth in October.

“The figures in October are deceptive. Ordered three months back when the dollar was valued at about P44 but paid when it was nearing P42 to the dollar, the October deliveries were made at a loss,” he volunteered.

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