Exports jump 21.4%, thanks to increasing China demand

Bloomberg and Roderick T. dela Cruz
Manila Standard
http://www.manilastandardtoday.com/?page=news3_feb13_2008

PHILIPPINE exports grew at their fastest pace in 16 months in December as shipments to China increased, bringing the total receipts to over $50 billion for the first time on record last year.

Shipments abroad gained 21.4 percent in December 2007 from a year earlier to $4.48 billion, according to preliminary figures released by the National Statistics Office.

That’s the fastest pace since August 2006 and exceeded the 8.4-percent median estimate of seven economists in a Bloomberg survey.

Exports fell 2.1 percent in November.

The total export receipts actually hit $50.276 billion last year—a 6.1-percent increase—but they “fell short of the 11-percent target and were significantly lower than the 2006 growth of 15 percent,” Acting Economic Planning Secretary Augusto Santos said.

“China’s economic growth, which is still driven by consumers, is supporting our exports as demand for commodities and electronics grows,” said Jonathan Ravelas, an economist at BDO Unibank in Manila.

Demand from China, the world’s fastest-growing major economy, is supporting the Philippines and other Asian-exporting nations as shipments to the US wane.

Exports account for about half of the Philippines’ $117-billion economy, which expanded at its fastest annual pace in 31 years in 2007.

Shipments to China gained 12.8 percent in December from a year earlier to $515.15 million. They dropped 12.4 percent a month earlier.

Exports to Hong Kong rose 65 percent to $488 million, accelerating from a 28-percent gain in November.

Economists at Goldman Sachs Group Inc. and Merrill Lynch & Co. project the US, Asia’s biggest export market, will suffer its first recession since 2001 this year.

Malaysia’s shipments to the US in November fell 16.5 percent compared with a 26-percent surge in exports to China.

Exports to the US, the Philippines’ biggest market, advanced 7.7 percent to $725.4 million in December from a year earlier. Shipments to Japan, the no. 2 destination, added 19.9 percent to $641.1 million.

Shipments of electronics, which make up two-thirds of the Philippines’ total exports, climbed 12.3 percent from a year earlier to $2.54 billion.

“The year-end demand effect may have boosted exports but this could be just temporary,” said Vishnu Varathan, an economist with Forecast Singapore Pte.

“The tech sector is particularly vulnerable to a global slowdown and this is where [the] Philippines’ exports exposure really is.”

Exports of clothes made for fashion houses, such as Polo Ralph Lauren Corp. and Gap Inc., declined 7.8 percent from a year earlier.

But garment exports fell 13 percent to $2.3 billion from $2.646 billion in 2006.

Refined petroleum product sales rose 20.7 percent to $1.109 billion.

Copper, gold and other mineral shipments increased 64 percent in December. Woodcraft and furniture rose 25 percent.

The other top export items last year were ignition wiring sets ($890.752 million), coconut oil ($733.813 million), bananas ($396.279 million), metal components ($481.318 million), and pineapple products ($246.277 million).

By commodity group, agricultural exports grew 12.9 percent to $2.3 billion, while mineral exports rose 21.2 percent to $2.548 billion.

Sales of manufactured exports grew 5.26 percent to $42.804 billion.

The Philippines’ top buyers last year were the United States, Japan, China, The Netherlands, Singapore, Germany, Malaysia, Korea and Thailand.