MANILA, Philippines – The National Economic and Development Authority (NEDA) yesterday said the impact of the magnitude 9 earthquake and powerful tsunami that hit Japan last March 11 on the export earnings of the country’s electronics industry would be temporary.
Socioeconomic Planning Secretary and NEDA Director General Cayetano Paderanga Jr. said in a statement that the twin disasters’ effect on electronics demand may affect the Philippines’ export performance but only in the short-term.
“There are indications that the softening demand will be compounded in the coming months by shortages of certain electronic components due to disasters in Japan that have started to negatively affect the electronics industry,” Paderanga stressed.
Data from the National Statistics Office (NSO) showed that the country’s merchandise exports grew by 10 percent to $7.865 billion in the first two months of the year from $7.15 billion in the same period last year.
For the month of February alone, export growth slowed to 8.2 percent to $3.864 billion from $3.57 billion in the same month last year.
Electronic products, which accounted for more than half of total export revenue in February, retreated by 2.7 percent to $2.071 billion while shipments of semiconductors that comprised more than a third of the total declined by 3.8 percent.
“The reduced earnings from semiconductors in February 2011 were partly attributed to the imbalanced supply and demand. Prices are declining, despite the build-up of inventories that still have the capacity to accommodate demand until June 2011,” Paderanga said.
Japan was the top destination of Philippine-made products in February accounting for about 17.2 percent or $665.7 million of the country’s total exports. Shipments to Japan included semiconductors, wood manufactures, chemicals, and electronic equipment and parts.
The NEDA chief said the temporarily suspension of plant operations of at least seven major companies near the Fukushima prefecture will likely affect demand for semiconductors, electronic data processing units, machinery and transport equipment.
Nonetheless, Paderanga is confident that Japan’s economy would bounce back quickly.
He noted that merchandise exports to major economies in East and Southeast Asia continued to post positive gains in February.
Data showed that exports to Vietnam surged 29.6 percent on account of higher foreign sales of crude oil, coffee, rice, rubber, shoes and sandals, electronics, and sea food products.
Other top performers in the region were Indonesia with 28.9 percent, Hong Kong with 24.9 percent, and Thailand with 21.7 percent.
He said exports to China posted a low growth of 2.4 percent due to decreased exports of textile yarn and fabrics, apparel and clothing accessories, furniture, and data processing equipment and parts.
“Intra-Asian trade has been growing quite fast. Countries have been selling more to China, especially agricultural products. We will probably explore India, even though they are just as tropical as the Philippines,” he explained.
The country’s merchandise exports zoomed by 33.7 percent to $51.393 billion last year from $38.436 billion in 2009. The strong domestic output helped the Philippines post its strongest economic growth in 34 years after its gross domestic product (GDP) expanded by 7.3 percent last year from 1.1 percent in 2009.
The Cabinet-level Development Budget Coordination Committee (DBCC) sees the country’s GDP growing between seven percent and eightpercent this year and next year.
However, it expects full year export growth to decelerate to 13 percent this year partly due to base effect and the softening of the demand in some segments of the electronics industry. –Lawrence Agcaoili (The Philippine Star)
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