EXPORTS fell the most in 28 years in January, deepening the Philippines’ economic slowdown as demand for Asia’s electronics and other goods plunge amid a global recession.
Overseas sales plummeted 41 percent to $2.49 billion from a year earlier, the National Statistics Office reported yesterday. That compares with a revised 40.3-percent fall in December, and is the biggest decline since Bloomberg data began in January 1981.
The Philippines trimmed its 2009 economic-growth target to a range of 3.7 percent to 4.4 percent last month as it predicted exports will fall. The global economy is likely to shrink for the first time since World War II, and trade will decline by the most in 80 years, with developing nations bearing the brunt of the contraction, the World Bank predicts.
‘‘There are no signs that global demand is recovering and electronics will continue to suffer,’’ said Vishnu Varathan, a regional economist at Forecast Singapore Pte.
“The slump will cost a lot of jobs and the Philippines is not going to be exempted. The momentum seems to point to the peso going above 50 this year.”
The currency has declined 2 percent to 48.355 to the dollar this year as investors sell emerging-market assets on concern the regional slowdown will deepen. The lower end of the Philippine government’s 2009 growth forecast would be the slowest pace in eight years.
The Philippine Stock Exchange Index fell for a third day, dropping 0.9 percent.
The central bank expects growth in remittances to stall this year, and Standard Chartered Plc forecasts a 4-percent decline after a 14-percent increase in 2008, further hurting economic expansion. Money sent home by Filipinos abroad grew 0.8 percent in December from a year earlier, the smallest gain since April 2006.
“The bigger risk to the peso could be remittances because the Philippines is not as export-oriented as Singapore or Thailand,” said Chow Penn Nee, an economist at United Overseas Bank in Singapore who expects the Philippine economy to grow 2 percent this year, missing the government’s forecast.
Funds sent home by Filipinos abroad, equivalent to about 10 percent of the $144 billion economy, help finance purchases of homes, cars and mobile phones. Consumer spending is two-thirds of the country’s gross domestic product.
The Bangko Sentral last week cut its key interest rate by a quarter-point, to 4.75 percent, the lowest since May 1992. Concern that a weaker peso and rising utility costs may fan inflation prevented a bigger reduction, though the central bank would continue to lower borrowing costs and free up cash for lending, Governor Amando Tetangco said after the decision.
Manufacturers including Intel Corp. have cut jobs in the Philippines as exports plunged. Companies might fire as many as 100,000 workers this year, Economic Planning Secretary Ralph Recto said Jan. 29.
Electronics shipments, accounting for more than half of total export revenues, declined 48 percent to $1.35 billion in January. Exports of clothing fell 22 percent to $135 million.
Sales to the US, the top destination for Philippine exports, dropped 34 percent to $457 million. Shipments to Japan declined 40 percent to $379 million, and exports to China fell 68 percent to $163 million. Exports to Hong Kong, the Netherlands, Singapore, Korea, Thailand and other markets were also down by double-digit rates.
Sergio Ortiz-Luis, president of the Philippine Exporters Confederation, said exports would continue to decline in February and March, though at a lower rate. Roderick T. dela Cruz, Bloomberg, AFP