OCTOBER EXPORTS JUMP 6.2%
MANILA, December 6, 2003 (MALAYA) Exports felt the glow of an economic pick-up in the country's key markets in October, rising 6.2 percent from a year earlier but still falling short of recent stellar rises seen by some Asian neighbors.
A 6.3 percent rise in key electronics exports helped push overall exports up to $3.223 billion in October from $3.033 billion a year earlier, the National Statistics Office said.
Export growth was the fastest since an 8.6 percent rise in the year through March, which came before the region's economies felt the impact of the SARS virus and war in Iraq, providing further evidence an Asian recovery is under way.
The growth in electronics shipments, which make up two-thirds of exports, was the highest this year.
In the first 10 months, exports were up just 1.0 percent on a year earlier, at $29.489 billion. The government expects five percent greater export revenues this year, which would represent a slower expansion than the 9.5 percent seen in 2002.
Exports, which rose 2.3 percent in the year through September, contribute about two-fifths of gross domestic product. The figures are not adjusted for seasonal patterns, which typically distort month-to-month changes in trade data.
"It was more or less in line with market expectations," said MMS/S&P regional economist David Cohen.
"This is the highest growth rate since March but it is still lackluster compared to the gains made by other countries in the region."
Asian exporting economies have started to ride a recovery in the key US market.
The booming Chinese economy is also sucking in imports, although some Asian countries, including the Philippines, are struggling to deal with stiff competition from Chinese exports.
South Korean exports were up 22.5 percent from a year earlier in November, while Thai exports were up 15.6 percent in October. Malaysia scored export growth of 4.4 percent in the year through October.
"The plus is that the recovery in electronics we were seeing globally over the past three months appears to be filtering through in the Philippines as well," said G.K. Goh Securities economist Song Seng Wun.
"The global recovery in electronics and chip sales may see sustained exports growth in 2004 in the Philippines."
Analysts have said that the Philippine electronics export model, which consists largely of assembling imported parts and shipping them out again, looks outdated and vulnerable to Chinese competition. Electronics executives warned recently that their industry was in severe trouble, partly due to a lack of government support.
The country ran a trade deficit of $1.686 billion in the first nine months of the year, putting further pressure on an economy already laboring under a huge budget deficit and Asia's weakest currency this year.
Politics is another major threat to growth as business people brace for a potentially volatile election campaign leading up to next May's national polls.
"We may see some investments being postponed," said Song. "So the Philippines may still lag behind other countries like Malaysia and Taiwan."
The economy rebounded slightly in the third quarter after flirting with recession earlier this year, growing a seasonally adjusted 1.7 percent from the second quarter, but much of the improvement was due to good weather that boosted farm output.
Beyond electronics, key Philippine exports are textiles, clothing, coconut oil, furniture and tropical fruit. Its major markets are the United States, Japan, Hong Kong, the Netherlands and Malaysia. (Reuters)
Reported by: Sol Jose Vanzi
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