MANILA,  March 5, 2004
 (STAR) By Rica D. Delfinado - The country’s exports earnings tumbled by 10.4 percent to $2.844 billion in January from $3.176 billion a month earlier, dimming hopes the economy is starting to feel the effect of a global pick up in demand, the National Statistics Office (NSO) reported yesterday.

The latest export figure was the lowest in eight months, the government statistics office said.

Some officials raised fresh doubts on the accuracy of NSO’s latest trade data, prompting Economic Planning Secretary Romulo Neri to order a review of January export data due to suspected under reporting, the second time this year the government has ordered such a review.

Yesterday’s data showed January’s exports fell from the previous month on weak seasonal demand, but rose 4.1 percent from a year earlier, as the economy struggled to ride a global pick-up in demand.

Song Seng Wun, regional economist at G.K. Goh Securities in Singapore, said the month-on-month fall was twice what he had expected.

Jose Vistan, analyst at AB Capital Securities Inc., said the slowdown from nine-percent growth in the year through December warranted a review of the figures.

"If the variance of the year-on-year growth is wide, I guess the data needs to be double-checked," Vistan said.

Officials at the government statistics office said they would review whether they had captured all the export data for January from the automated export documentation system at the Bureau of Customs (BOC).

The NSO reported that electronic exports, which accounted for 67.8 percent of total receipts in January, rose 1.2 percent from a year earlier to $1.928 billion.

December electronic exports rose 6.9 percent year-on-year to $2.06 billion.

Articles of apparel and clothing accessories remained as the country’s second top earner with shipments worth $158.61 million, or 11 percent lower than $178.3 million a year ago.

Other top exports for January were: coconut oil, $40.48 million; other products manufactured from materials imported on consignment basis, $40.07 million; cathodes and sections of cathodes, $37 million; and petroleum products, $36 million.

Sluggish growth a worry

The latest data was the smallest export amount since May, but analysts noted that January and February were usually weak months following strong seasonal demand for exports in December.

Sluggish growth in exports has raised concern the economy, already handicapped by a weak peso and jitters ahead of May 10 national elections, is slipping behind its neighbors and losing out to Chinese competition.

Song said the weak January performance could have resulted from fewer working days in China and Singapore as those countries celebrated Chinese New Year.

"Exports to these countries slowed down probably because of the long break," he said before the review was announced. "Exporters probably held back their shipments".

Despite the weaker-than-expected data, Song said he would stick to his projection of 10-15 percent export growth in 2004. The government has forecast 10 percent.

Exports, which make up two-fifths of gross domestic product (GDP), rose just 1.5 percent last year. Electronics exports, the biggest sector, fell 2.6 percent.

The economy’s resilience will be tested to the full in the coming months during a potentially volatile and violent campaign.

Filipinos go to the polls on May 10 to vote for a new president and 17,000 other elected officials.

Political uncertainty has shunted the peso to record lows against the dollar around 56.30, making the country’s goods more competitive, but economists say this is not all good news for exporters.

"The weaker peso is a double-edged sword," said Vistan. "A weak peso could result in higher interest rates which can raise cost of production."

After brushing with recession early last year, the economy has entered a mild recovery, driven mainly by healthy agriculture growth and consumer spending.

It posted GDP growth of 4.5 percent in 2003 and the government is forecasting growth of up to 5.8 percent in 2004.

Reported by: Sol Jose Vanzi

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