Philippine export sector seen to recover this year
The country’s exports are seen to recover this year from last year’s contraction amid prospects of an improving US economy and still robust demand from China.
According to The Market Call, the joint publication of First Metro Investments Corp. and the University of Asia and the Pacific, exports are likely to grow between 5 and 7 percent this year as global demand gradually picks up.
In 2011, the Philippine export sector saw declining earnings as demand for electronics, the country’s major export product, fell due largely to the sluggish performance of the US and euro zone economies.
The United States and the euro zone are two of the biggest markets for intermediate electronics exported by the Philippines.
Economists said that during tough times, consumers tend to focus spending on basic goods and forego consumption of non-essentials such as electronics.
Electronics account for more than half of the total exports of the Philippines.
Whether the euro zone can implement measures that will significantly ease its debt woes remains to be seen, The Market Call said indicators of improving US economy may be indicating improving demand for imported goods—such as those from the Philippines—in the months ahead.
The US unemployment rate fell to 8.5 percent in December, the lowest in nearly three years, signaling a potential rise in consumption in the world’s biggest economy this year.
Meantime, The Market Call added that China was seen to still have significant demand for imported goods such as those from neighboring countries like the Philippines.
Although China, which was earlier feared to suffer from overheating due to sharp growth rates over the past few years, was seen to decelerate this year, The Market Call said the slowdown would likely be modest and so demand would still be strong.
The United States accounts for about 15 percent while China takes up about 14 percent of total Philippine exports.
The Market Call said improving exports should help accelerate growth of the Philippine economy this year after a slowdown last year.
In the first three quarters of 2011, the Philippine economy grew 3.6 percent year-on-year. This elicited projections of a full-year growth that was less than the 4.5-percent target of the government.
The Market Call said that for this year, the domestic economy was poised for faster growth, adding that the government’s target of 5 to 6 percent was realistic.
