Global recovery pushes exports to 14-year high

EXPORT growth held near a 14-year high in February as the global economic recovery boosted demand for the Philippines’ electronics goods, the government said Tuesday.

Shipments abroad increased 42.3 percent from a year earlier to $3.57 billion after rising 42.5 percent in January, the National Statistics Office said. That exceeds the median estimate for a 39.9- percent gain in a Bloomberg News survey of six economists. Growth in January was the fastest since April 1995.

Asian exports are rebounding as customers in Europe and the US increase purchases of Philippine-made Texas Instruments Inc. semiconductors and Malaysian-produced Sime Darby Bhd. palm oil.

The National Economic Development Authority would probably recommend that the government raise its 2010 growth target by the middle of the year, Director Dennis Arroyo said last month.

“Strong exports should bode well for economic activity, and that’s good for the employment picture,” Ildemarc Bautista, an economist at Metropolitan Bank and Trust Co., said before the report.

“The growth in exports is due to the global economic recovery,” Finance Undersecretary Gil Beltran said Tuesday.

“The markets are alive again after nearly dying last year.”

“The outlook for March remains favorable, with [computer] chip prices having risen another 25 percent,” Barclays Capital said Tuesday.

“We have also seen strong March export prints out of Taiwan and China.”

Electronics sales, which make up more than half of the exports, rose 53 percent to $2.07 billion in February from a year earlier, Tuesday’s report showed. Worldwide semiconductor sales increased 56.2 percent in February from a year earlier, according to the Semiconductor Industry Association.

HSBC Holdings raised its 2010 forecasts for the peso, saying transfers from overseas Filipinos were likely to grow faster than the bank had previously expected.

The peso would strengthen to 44 to the dollar this quarter, reach 43 in the following three months, and end the year at 42, Europe’s largest bank said in a research note published Tuesday. Its previous projections were for exchange rates of 45, 44.50 and 43.50, respectively.

“We expect remittance flows to pick up and the [foreign exchange] policy to become more favorable for peso appreciation,” HSBC said.

Money sent home by Filipinos living abroad, second only to exports among the nation’s sources of foreign exchange, would climb 7.7 percent this year, more than the 5.6-percent increase predicted earlier, the note said.

HSBC’s new peso estimates suggest the currency will strengthen by 6.5 percent this year from Tuesday’s closing level of 44.745 to the dollar. The median forecast of 13 analysts surveyed by Bloomberg is for a year-end exchange rate of 45.

The government might raise its 2010 export growth forecast by a percentage point to a range of 8 percent to 10 percent, Beltran said.

Its estimate of this year’s average exchange rate might be strengthened to between 46 and 48 per dollar, from 46 to 49, he said. Bloomberg, with Elaine R. Alanguilan, Manila Standard Today