PHILIPPINE DAILY INQUIRER - January 11, 2010

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Driven by electronics: This year, RP may expect up to 15% rise in exports

AFTER A SHARP SLUMP LAST year, the country’s exports are expected to pick up in 2010, registering growth of between 12 and 15 percent, fueled by the anticipated recovery of the global economy that may translate to higher demand for electronics and other goods.

The projection was made by First Metro Investments Corp. and University of Asia and the Pacific (UA&P), in their monthly publication Market Call.

Victor Abola, professor at UA&P, said in a press conference yesterday that the global recovery from a crippling crisis, described to be the worst since the Great Depression of the 1930s, would mean higher demand for goods coming from the Philippines and other emerging economies.

Demand for electronics, such as computers and cellular phones will pick up, thereby boosting the country’s exports earnings. Electronics exports are the country’s major dollar earner, accounting for about 60 percent of total export revenues.

Latest data from the National Statistics Office showed that Philippine exports reached $31.3 billion in January to October last year, down 27 percent from $42.89 billion in the same period the previous year.

Analysts said the drop in exports was mainly due to sluggish demand for electronics. During a crisis, consumers tend to focus expenditure on food and other basic goods, spending less on non-essential items.

Decline in exports came when the United States and other industrialized nations—major export markets of the Philippines and other developing nations—fell into a recession.

Weak exports were blamed for the slowdown of the Philippines’ own economy. The domestic economy is projected to have grown by only 0.8 percent last year from 3.9 percent the previous year and 7.2 percent in 2007.

“Recovery was earlier than expected because of combined monetary and fiscal policies,” Abola said, referring to most governments’ efforts to pump-prime their respective economies.