Export targets hiked anew

Further adjustments likely following surprising Q1 GDP result

EXPORT GROWTH TARGETS have been revised upwards on the back of strong orders and could be hiked further following the economy’s better-than-expected performance in the first quarter.

Senen M. Perlada, executive director of the Export Development Council (EDC), said the public-private body, in a May 21 meeting, adjusted its 2010 growth forecast to 22% from 20%.

With exports “really going strong,” he said the target for merchandise goods had been raised to 20% from 16% while that for service exports was kept at 30%.

“The electronics sector is still performing strongly and may grow around 25%. Giftware may also grow by 10%,” added Mr. Perlada, who is also head of the Trade department’s export promotion bureau.

The adjustment was made ahead of last Thursday’s announcement of 7.3% gross domestic product (GDP) growth for January to March, which the government said was due in part to increased trade following last year’s economic downturn.

The EDC’s 22% growth target is more optimistic than the similarly adjusted 12% uptick forecast last month by the Bangko Sentral ng Pilipinas but Sergio R. Ortiz-Luis, Jr., president of the Philippine Exporters Confederation, Inc., called it “conservative.”

“We can expect higher growth because the economy is improving,” he said, noting the surprising first-quarter GDP growth.

Total export sales may grow to $57.806 billion this year, Mr. Perlada told BusinessWorld.

An electronics sector official, meanwhile, said their own projections may also be changed.

“We were initially [looking] at 10%-15% [growth] then 15%-20%… Personally I think we may have a guidance of over 20% but we want to wait until we finish consulting with our member-companies and by June we would have revised our growth targets,” said Arthur J. Young, Jr., chairman of the Semiconductor and Electronics Industries in the Philippines, Inc.

The semiconductor industry, he said, is experiencing strong sales due to increased production of laptops, netbooks, LED (light emitting diode) television sets and hybrid cars.

“The electronics sector remains bullish and could experience a high double-digit growth for the year,” Mr. Young said.

Last year, merchandise exports contracted by more than a fifth to $38.327 billion.

Earlier this month the government reported that merchandise exports rose by an annual 43.7% in March to $4.18 billion, sustaining double-digit growth for the third consecutive month.

Electronics, which accounted for more than 57.9% of total export revenue for the month, jumped by 49.1% to $2.42 billion, a rebound from a 33.8% contraction a year earlier.

March’s result brought first-quarter growth to 42.9% and increased the outbound shipments tally to $11.3 billion.

The first-quarter GDP growth of 7.3%, meanwhile, was the economy’s best performance since the second quarter of 2007. It topped the government’s forecast of a 2.9%-3.9% uptick.  –Businessworld