RP exports still 5 percent below precrisis level–World Bank

DESPITE the robust growth in exports, the World Bank believes that the country’s export growth is still 5 percent below its level prior to the onslaught of the global economic crisis.

World Bank Chief Economist Eric LeBorgne said Philippine exports have not yet fully recovered from the global financial crisis. He said it was natural that exports will be impressive in the first quarter of the year due to base effects.

LeBorgne said in the first quarter of last year, export earnings were “collapsing” at the rate of 40 percent to 60 percent. While the recent export numbers have been impressive, these are still not enough to bring export earnings back to precrisis levels, according to him.

“The high growth rates are based on the first quarter of 2009, when exports were collapsing anything from 40 to 60 percent. [Even if] you have a rebound, we still have levels that are much lower than the dollar amount of exports prior to the crisis. There’s still a lot of catch-up to be done before you reach the level of exports before the global recession. The Philippines is still way below export’s precrisis level,” LeBorgne said.

Based on World Bank estimates, Philippine exports are still 5 percent below precrisis levels, or around $300 million below precrisis figures.

LeBorgne added that with the slowdown in Europe, the country’s exports may not yet be able to further increase its growth. He said Europe, the United States and Japan are the major consuming markets.

With this, LeBorgne cautioned that any slowdown in these markets will affect final consumer demand for products like electronics and semiconductors.

Dr. Ernesto Pernia, University of the Philippines economist and former Asian Development Bank (ADB) economist, said that while it is true that the base effects may be wearing off, the bigger factor that caused this is the slowdown in Europe, which is affecting other developed countries.

Pernia said, however, his exports outlook is a bit positive due to the proclamation of President-elect Benigno Aquino III and Vice President-elect Jejomar Binay. He said the start of the Aquino administration may restore more confidence in the economy.

“Exports could be poised for higher growth later if the new President makes encouraging moves and the world economic recovery doesn’t stall,” Pernia said.

The National Statistics Office (NSO) recently reported that exports growth was the slowest in four months in April.

NSO data showed that export earnings in April reached $3.573 billion, only 27.4 percent higher than the $2.804 billion posted in the same period last year. It also posted a month-on-month contraction of 14.5 percent from $4.181 billion in March 2010.

In the same period last year, the country’s export earnings contracted by as much as 35.2 percent to $2.803 million.

The biggest contraction posted by exports was in January 2009, when exports contracted by as much as 40.6 percent to $2.511 million. –Cai U. Ordinario / Reporter, Businessmirror