Philippine exports seen to remain weak in 2nd half

Philippine exports are seen to remain weak in the remainder of the year, as global demand for electronics—the country’s biggest export earner—continues to soften given the problems confronting major markets such as the United States and Europe.

This was contained in investment bank DBS’ paper on its outlook for various Asian economies.

DBS said the Philippines would continue to be affected by the unfavorable developments offshore, largely in terms of exports.

The country may not see significant improvements in its export income in the remainder of the year from what has been seen in June, DBS said, noting that demand for non-electronics products was not expected to compensate for the decline in demand for electronics.

“Given brewing external headwinds, we are not convinced that non-electronics exports can maintain its steady uptrend. For the whole of 2011, we believe there will be anemic growth in total export numbers even after factoring a pickup toward the end of the year,” DBS said.

Although the Philippines has been able to diversify its export markets, the United States and Europe remain the biggest destinations for its products.

Philippine exports dropped by 10.2 percent in June to $4.09 billion from $4.11 billion a year ago.

The average growth in the first six months was still positive at 4.1 percent, rising to $24.72 billion from $23.74 billion.

While exports may remain sluggish for the remainder of the year, Philippine economic officials said the economy was not expected to be significantly affected by the turmoil offshore.

Earlier, Bangko Sentral Governor Amando Tetangco Jr. said the Philippines had been relying less on exports and more on domestic consumption for its growth.

Finance Secretary Cesar Purisima said the country had stable macro-economic fundamentals to keep the impact of negative developments abroad on the Philippines at a minimum.

In the meantime, DBS said Asian countries in general were likely to remain stable despite the problems in the United States and Europe. Asian economies have grown over the past years with a declining contribution from Western economies, it said.

DBS said economic and fiscal woes in the West would impact Asian economies, but not likely in a significant way.

The United States recently has its credit rating downgraded by Standard & Poor’s by a notch from the previous AAA rating, mainly due to its debt woes and the challenges faced by its economy.