Home » The Export Advocate » Upbeat On Export Growth

The year just past was a bad one for Philippine exports, pulled down chiefly by a quick retreat in electronics products, although most other exports posted double-digit growth.

The drop was 6.86 percent, equivalent to lost earnings of US$3.6 billion from sales of $51.5 billion in 2010 to $47.9 billion last year.

In one forum at the height of the export slowdown, a leading logistics company moving goods in and out of the country called their business “matumal” (slow) owing to the sudden drop in delivery of electronics parts brought to the country and finished goods shipped to markets abroad.

Surprisingly, the Export Development Council, the private-public body that oversees the execution of the export development plan, has not trimmed down the $80-billion target or about ten percent growth for this year. It is also sticking to its original goal of doubling export earnings to $120 billion by 2016.

After the recent export forum called by the Bangko Sentral ng Pilipinas (Central Bank of the Philippines), we now know why most players in the export sector are bullish that they will again stage a spectacular recovery and snap back to the high growth path this year.

SEIPI head Ernesto Santiago has boldly projected that the electronics group, which accounts for half of the country’s total exports, will grow between ten and 15 percent this year. This, they will pull off despite the fact that the industry nosedived by 23.67 percent last year — equivalent to almost one fourth of their sales the other year. Snapping back to double-digit growth is indeed a bold target.

Santiago said the industry shoveled in $2.45 billion in investments despite suffering from sluggish sales last year. New investors are big players from Japan, perhaps relocating here due to the earthquake and tsunami that country suffered or because their factories in Thailand were flooded and heavily damaged last year.

But the old timers in the business did most of the investing, putting on the ground 70 percent of the total investments. Santiago estimates over 35,000 direct jobs will be created with that kind of investment.

Due to sluggish sales last year, the big players have their inventories depleted and must be replenished. They are also adjusting to new realities when the buying public worldwide is going for smart phones and smart automobiles whose electronic gadgets now make up close to the total cost of a car.

There is not much problem for the other industries. Trade officials expect that garment exports to the US will rise again beginning this year when the US Congress approves the Save Act which will reopen special trade ties between US textile makers and our own garments exporters.

Agriculture and forest-based products were proven most resilient during last year’s trade slowdown, most of them posting double-digit growth. They are expected to continue their sterling record this year.

Mineral exports which again rose from the shadows to become last year’s second biggest export, outperforming garments, is expected to continue its winning streak. The Bureau of Mines reports that eight on-going development projects are now on their advanced stage of development despite so many obstacles that has beset the industry since its decline in the mid-eighties.

We are again a world power in copper and gold trade. Also, our miners are now extracting a wider range of industrial metals that include nickel, iron, manganese and chromite.

It looks like we are into a phase of export growth that is less vulnerable to global buying trends reminiscent of the 1990s.

Despite the bullish sentiment and environment, we are aware of the formidable challenges. We hope that government focuses on addressing these issues soonest, even as private sector drives business amidst all the odds.

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