After lean 2011, bright economic forecast and rosy signs for '12
Economic planners of the Aquino administration are sticking to their merchandise exports forecast of 10 percent this year, despite their failure to meet their 2011 projection, National Economic and Development Authority Director-General Cayetano Paderanga Jr. said Sunday in a statement.
The NEDA chief did not give specifics on what the Aquino administration will do in the short term to attain the $62.3 billion goal – an uphill climb from $47.9 billion last year. He reiterated an oft-repeated remark about “diversification strategies... to minimize the country's vulnerability to adverse shocks, both external and domestic.”
The NEDA chief did not give specifics on what the Aquino administration will do in the short term to attain the $62.3 billion goal – an uphill climb from $47.9 billion last year. He reiterated an oft-repeated remark about “diversification strategies... to minimize the country's vulnerability to adverse shocks, both external and domestic.”
Historical data on Philippine exports show 2009 and 2011 as decline years. From the dip in 2009, the exports sector recovered in 2010. Economic planners are hoping for a similarly strong performance in 2012.
Meanwhile, the Wall Street Journal painted this weekend a rosy picture of early 2012. "Investors appear to be responding positively" to Aquino's anti-corruption campaign, according to the newspaper's correspondent James Hookway, highlighting in particular the charges brought against ex-President Gloria Arroyo and the impeachment trial of Chief Justice Renato Corona.
The Journal reported that the Philippines in January sold $1.5 billion in US-denominated bonds "at a yield comparable with those of European countries such as Spain and Italy."
"International financial markets are reassessing the Philippines' place in the global pecking order as concerns over Europe's financial health increase," Hookway wrote.
Recovery from 2011
That is welcome news after the doldrums of 2011. The National Statistics Office (NSO) said last Feb. 10 that goods exports fell “20.7 percent to US$3.3 billion in December 2011 compared to the previous year, with full-year earnings for 2011 contracting by 6.9 percent.”
NEDA chief Paderanga said the export sector is still expected to earn $62.3 billion this year but there could be “significant downside risks to projections, associated with the weak global demand resulting from slower growth in advanced economies and other major markets such as the Peoples Republic of China and ASEAN..."
He chose to take a medium-term view that stresses “trade logistics, business and policy environment, labor productivity, the link between exporters and micro, small and medium enterprises, research and development, and technology in order to move up the value chain and enhance the competitiveness of the export sector."
Paderanga said contract manufacturers of electronics exports “could continue to experience weak growth in 2012.” This sub-sector is responsible for more than 50 percent of merchandise goods shipped out to the rest of the world. The value of outbound electronics shipments plunged nearly 24 percent to $23.72 billion in 2011.
"Industry reports noted that contract manufacturing business, which is composed of electronic manufacturing services and original development manufacturing, is anticipated to decline slightly worldwide in 2012. It was also reported that total contract manufacturing revenue will decline by approximately one percent (or US$3 billion) from US$360 billion in 2011," said Paderanga.
Exporters see growth areas
Philippine Export Confederation (Philexport) president Sergio Ortiz-Luis Jr. points to non-electronics exports and the markets of Japan, China and the United States as the “good news” sectors.
Ortiz-Luis stressed in a recent message to his Philexport colleagues that “our non-electronics products are now performing” as evidence by the “minimal” decline in total exports compared to the plunge in electronics exports.
He specifically noted the growth in earnings of exporters of automotive electronics, fruits and vegetables, furniture, basketwork, and garments.
As to markets, Ortiz-Luis said, “Japan gave indications of recovery” followed by the United States and China.
Japan, China, Thailand and Taiwan were the Philippines' top export markets that took in more merchandise shipments from Filipino producers in 2011. Presented are the export growth rates in 2011.
Historical data on Philippine exports show 2009 and 2011 as decline years. From the dip in 2009, the exports sector recovered in 2010. Economic planners are hoping for a similarly strong performance in 2012.
Data of the NSO support the Philexport president’s observations. Among the highest growth rates in agro-based product exports in 2011 were:
- Coconut oil - $1.78 billion
- Centrifugal and refined sugar - $354.3 million
- Fruits and vegetables - $978.5 million
- Shrimps and prawns - $367.58 million
Other sectors also chipped in last year to make up for the decline in electronics exports:
- Garments - $1.89 billion
- Wood manufactures - $1.68 billion
- Chemicals - $1.89 billion
- Processed food and beverages - $1.03 billion
- Copper metal - $1.13 billion
- Gold - $214.39 million
Japan, Taiwan, Thailand and China were among the country's top 10 markets and all four posted significant increases in export growth rates while other markets in the top 10 recorded declines.
— Earl Victor Rosero/LBG/HS, GMA News
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