Exporters brace for faster-than-expected recovery

EXPORTERS are bracing for a quicker recovery than earlier expected, with demand returning to pre-crisis levels in the first month of the year.

Sergio Ortiz Luis, Philippine Exporters Confederation Inc. president, on Wednesday said they expect revenues to match pre-crisis levels by the end of this year.

“Initially, we had a very conservative export growth projection of between 10 percent and 15 percent. But if electronics would grow by between 25 percent and 35 percent this year, total exports could go up 20 percent,” he told The Manila Times over the telephone.

On Wednesday, the government reported that shipments abroad of Philippine-made goods rose at their fastest pace in nearly 15 years because of strong sales of electronics, which comprise the bulk of the country’s exports.

The National Statistics Office said dollar receipts grew by 42.5 percent to $3.58 billion in January from $2.51 billion in the same month last year. Exports contracted by 40.6 percent a year ago.

On a monthly basis, dollar receipts from the country’s merchandise trade also rose by 8 percent.

“This is the highest year-on-year growth rate posted since April 1995. Most major commodity groups supported this growth,” acting Socioeconomic Planning Secretary Augusto Santos said.

The government expects exports to grow between 7 percent and 9 percent this year.

“The rebound in electronic products sustained the 40.9 percent increase recorded in the preceding month,” Santos said.

Electronics, which accounted for 56.8 percent of the total export revenue in January, jumped 51.2 percent to $2.034 billion.

Month-on-month, electronic products grew by 8.1 percent from $1.345 billion in December last year.

Arthur Young, chairman of the Semiconductors and Electronics Industries of the Philippines Inc., told the The Manila Times that demand for electronics is back to pre-crisis levels.

He said strong demand for consumer goods such as mobile and smart phones, flat panel TV sets, netbooks and laptops from all over Asia and the US would boost growth, adding that the sector’s target of between 15-percent and 20-percent growth is “conservative.”

The industry executive said Philippine manufacturers have ramped up production, with many operating at full capacity and on a hiring mode to meet the demand.

Ortiz Luis said January’s export surge is “good news” as well as a sign that the industry is en route to recovery, but cautioned that a strong peso and the high cost of doing business might temper the bullish outlook.

Young agreed, adding that semiconductors and electronics exporters are moderating their optimism amid “double booking” by importers, who are ensuring their inventories are replenished.

The country’s exports began falling in September 2008 as a series of failed US banks turned the credit taps dry worldwide, resulting in recessions in most of the Philippines’ major foreign markets. The country’s exports dropped 21.9 percent in 2009, but began recovering in November, with growth picking up to 5.1 percent.

Layoffs in the country’s economic zones last year mostly came from semiconductors and electronics companies, which downscaled operations because of lack of orders from the traditional export destinations that were hit badly by the global recession.

Shipments of semiconductors and electronics last year plunged by about a fifth year-on-year. –BEN ARNOLD O. DE VERA Reporter and DARWIN G. AMOJELAR Senior Reporter, Manila Times