Friday, 11 December 2009

Early recovery for electronics

Sector sees 2010 growth of up to 20% given strong orders

SALES of the Philippines’ top export -- electronic components -- will likely recover earlier than expected based on strong orders received for the first quarter of 2010, the leader of an industry group said.

Export sales are expected to grow by as much as 20% next year, better than an initial 10% estimate, Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) Chairman Arthur J. Young said late on Wednesday.

Sales for 2009, however, are still projected to drop by roughly 20%, Mr. Young said.

Based on official data, the new outlook means 2010 sales posting a return to the $21.047-billion performance seen in 2008 after falling by a fifth to $18.837-billion this year.

"By 2010, it could bounce back. We had projected this [recovery to occur] towards 2011 ... but orders for the first quarter already look strong when they are usually flat or down," Mr. Young said in a telephone interview.

"We think you can see a nice growth next year, higher than 10% based on bookings for January to March looking pretty solid. The growth will be in the high ‘teens’ to maybe 20%."

Mr. Young maintained earlier projections for 2009: a sales decline of around 20-23%.

"I still believe the fourth quarter will be better than [the same quarter last year]," he added.

Semiconductor export sales have so far fallen by 30.87% to $12.841 billion as of October from yearago levels, official data show. It accounted for 41% of total merchandise export sales in that period.

University of Asia and the Pacific economist Victor A. Abola backed the industry group’s 2010 outlook.

"I tend to agree. More than the recovery in the US market which will continue, end-consumer demand [for electronics] will be quite robust in China and East Asia, India, Brazil and Russia," Mr. Abola said yesterday.

Sergio R. Ortiz-Luis, Jr., president of the Philippine Exporters Confederation, Inc. (Philexport), likewise noted yesterday that merchandise exporters in general were seeing a healthy number of orders for early 2010.

But he said Philexport was so far maintaining its 10% growth outlook for sales of merchandise and services. Exporters are watching the strengthening of peso which could make exports more expensive to foreign markets, he added.

Mr. Young likewise noted the peso’s strengthening, saying: "It is a concern but is not a major issue we’re looking at. We have to make sure our costs become more competitive."

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