Exports 2015 target retained despite slow PH growth
MANILA, Philippines – Despite the disappointing Philippine economic growth in the first quarter, the Export Development Council (EDC) is maintaining its 8% to 9% target for the year, as it banks on better performance of electronics and furniture in the next quarters, its chief said.
EDC Vice-Chair Sergio Ortiz-Luis, Jr said in a phone interview that his group is maintaining its exports growth target of 8% to 9% for 2015.
“Although it is more difficult to meet our target now as seen by the GDP (gross domestic product) growth slowdown last quarter, we are holding on to our exports target this year, as we see market to be better now than last quarter,” Ortiz-Luis said.
State statisticians announced on May 28 that the economy's first quarter growth decelerated to a 3-year low of 5.2% year-on-year. This is slower than the 5.6% gross domestic product (GDP) growth in the same period in 2014. It was also down from 6.6% in the fourth quarter last year, the slowest pace since the 3.8% growth recorded in the last quarter of 2011.
Decline in exports, along with weak public spending, was one of the root problems of the GDP growth slowdown last quarter.
“GDP tracks the exports, not the other way around. Normally, if there’s a 3% to 4% growth in exports, there’s a 1% increase in GDP,” Ortiz-Luis, who is also the president of the Philippine Exporters Confederation, Incorporated, said.
Export growth decelerated to 2.1% in March, from 12.1% in the same month last year, according to the latest data from the National Statistics Office.
Driven by semiconductors, electronics
The main drivers for this year’s exports growth, according to Ortiz-Luis, are seen to be semiconductors and electronics. “Also furniture exports is seen to recover in the coming months because the unfortunate drop last quarter was mainly due to seasonal demand.”
For the Semiconductor and Electronics Industries in the Philippines, Incorporated (SEIPI), its president Dan Lachica said his group sustains its target of 5% to 7% for the year, saying that “global demand is expected to continue this year.”
Lachica, however, told the industry to be “cautious on the expected power shortage this summer and continuing Manila port congestion” that could “negatively affect investor decisions.”
Interior Secretary Manuel Roxas II said at the 12th Philippine Semiconductor and Electronics Convention and Exhibition in Pasay City Wednesday, June 3, that he is confident that the electronics exports will continue, or even surpass, the growth it has experienced in the last few years.
“The Philippines is the best business decision as location for electronics among neighboring countries,” Roxas, a former trade secretary, said in his speech.
“With our infrastructure, quality of our people, and good governance, the government is optimistic that electronics exports and exports in general will continue to grow in the next years,” he added.
Capabilities in both manufacturing and research and design engineering will make the Philippines industry stronger, the DILG chief said.
“The Philippines has capabilities in manufacturing and assembly, and also in engineering design, testing, and research and development, in general,” he said.
Electronics and semiconductors, which made up nearly half of total export revenue in December, increased 9.9% annually to $2.38 billion that month. – Rappler.com