Philippine exports post fastest growth in 15 years

(UPDATED) — Philippine export earnings rose at their fastest pace in almost 15 years in January, with sales to major economic blocks that include Europe, the US, Eastern and Southeast Asia posting growth amid the global economic recovery. Exports surged by 42.5 percent to $3.578 billion from a year earlier, and by 8 percent from the December level, the National Statistics Office reported on Wednesday. It was the fastest growth since April 1995, when exports went up by 42.62 percent, the NSO said. Exports slid by more than a fifth last year amid the global economic slump. They first rebounded in November 2009 after 14 straight months of decline, fueled mainly by sales abroad of office and industrial equipment, as well as automotive parts. Federation of Philippine Industries President Jesus L. Arranza said the January export performance should trigger an upward revision of the full-year export forecast. "I'm not so sure if export growth can be sustained at that level, but if that is the figure coming out, it should trigger a review of our forecast," he told GMANews.TV. Exports are projected to grow by 7-9 percent this year after plunging by 27 percent to $31.3 billion last year. Arranza, who is also president and chief executive officer of the CIIF-Oil Mills Group, cited the strong showing of coconut oil, which was the third top earner in January with revenues worth $102.03 million. Earnings from coconut oil increased more than five times — the biggest growth among the country’s top 10 exports — which Arranza traced to higher copra output and increasing demand in the world market. Compared with electronics, coconut oil had a small share of 2.9 percent, but Arranza said a big portion of exported electronic products is imported. "So if you’re talking of net dollar earnings, the share of coconut oil is big," he pointed out. Accounting for 56.8 percent of export revenues in January, electronic products were the country’s top earner at $2.034 billion — representing growth of more than half from a year earlier. The segment grew by 8.1 percent from the December 2009 level. Sales of semiconductors, which made up 41 percent of total exports and had the biggest share among the major groups of electronic products, reached $1.467 billion — a yearly increase of 59 percent, the NSO said. Apparel and clothing accessories were the country’s second top earner in January, with a share of 3.5 percent and receipts reaching $125.05 million. The amount, however, was 7 percent lower than the year-ago level, the NSO said. Analyst Astro del Castillo of First Grade Holdings said things appeared to be looking up this year. "Most are saying it will be slow growth, but the Philippines benefited from increased consumption from several countries, particularly those that are favored by our exporters. I think it’s timely for us to expect a bounce for this industry," he said in an interview. Del Castillo noted that while there are still some aberrations — the debt crisis in Greece and global climate change concerns, for instance — "at the end of the day, global demand is pretty huge." "It’s a big opportunity for our exporters. We are confident that we will do better this year," he added. The analyst, however, does not think the exemplary export performance in January would change the general forecast for economic growth this year. "Somehow, there could be a balancing out. Hopefully, it could cushion the worse-than-expected effects of El Niño on the agriculture sector," del Castillo said. Top export markets The NSO said Japan continued to be the country’s top export destination in January, with export receipts worth $579.98 million, accounting for 16.2 percent of the total and representing 50 percent growth. The US followed with export earnings of $574.95 million or a 16.1-percent share, more than a quarter higher than a year earlier. Singapore emerged as the country’s third biggest market with shipments reaching $354.08 million or 9.9 percent of the total, representing almost triple growth from a year earlier. Germany ranked fourth with $299.11 million or an 8.4-percent share and an increase of almost a quarter. Other top 10 markets for January were China with $296.69 million; The Netherlands, $246.21 million; Hong Kong, $239.34 million; South Korea, $186.13 million; Malaysia, $114.12 million; and Thailand, $110.6 million. A rebound in exports and spending related to the local and national polls in May are expected to push economic output growth past 2.6 percent this quarter. Faster growth should be accompanied by higher revenue collection, in turn lessening pressure on state efforts to plug a massive budget deficit, the government said earlier. The government expects the economy to grow by 2.6-3.6 percent this year from 0.9 percent last year.