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Philippine Exports Grow Despite Decline in Global Disposal Income

MANILA, - Trade and Industry Secretary Manuel A. Roxas II said that strong semiconductor exports, the successful resuscitation of the local garments industry, a rebound in sales of automotive components and good performance of a number of non-traditional products and markets all contributed to the remarkable turnaround of Philippine exports in 2002.

Based on figures released by the National Statistics Office, merchandise exports last year grew by 9 per cent to US$35.1 billion in 2001. In contrast, merchandise exports dropped 16 per cent in 2001 compared to 2000 figures.

"Our export grew by 9 per cent despite overall decline in disposable income," Roxas said.

"This was achieved by a combination of precision marketing and export facilitation between and among the private sector and DTI," he said.

"The NSO figures do not include receipts of our service export sector, specifically the IT-enabled services," Roxas added. He estimated that receipts from this sector had doubled to an estimated $700 million last year.

Roxas noted that the country's merchandize export business was characterized by inventory movements of foreign buyers whose sales are heavily influenced by consumer spending forecasts in the following three months.

Last year's exports of semiconductor products grew by 19 per cent even as the sector displayed a month-on-month rollercoaster performance during the year, Roxas said.

December sales, for example, was 18 per cent lower that the November sales following a marginal 2 per cent forecast in consumer spending in the United States, European Union and Japan.

But the strong sales recorded during the earlier months pulled the whole sector to post a remarkable growth for the entire year, Roxas said.

The decline in the country's garments exports was successfully arrested as the DTI aggressively pushed an industry transformation plan and assistance package.

"Together with the industry leaders, we have re-engineered the sector's business model from low-end manufacturing to branded finished goods in the middle and higher end of the value chain," Roxas said.

Though garments exports posted a modest growth of a little less than one per cent (0.68 per cent), this year's performance is a sharp turnaround compared to the 6.2 per cent decline posted in 2001 over that of 2000.

Integration of raw material sourcing within the Asian region brought about by competitive pressures resulted to growth of textile to growth textile exports by 14 per cent for the entire year of 2002, Roxas added.

Motor parts and transport units also posted a 19 per cent growth last year from $6.7 billion in 2001 to $7.9 billion.

"We are now seeing the fruits of our joint efforts together with car companies in making the Philippines the regional hub for certain motor parts and assembled vehicle models," Roxas said.

In contrast, last year's export sales of ignition wiring sets dropped by 16 per cent over that of 2000.

The three are the country's leading export products.

Market acceptance of Filipino processed food products continues to strengthen as reflected by the 14 per cent growth posted during the year.

Meanwhile, total food exports grew by 5 per cent in 2002.

Home furnishings grew by 5 per cent as the U.S. and EU consumers continued to remodel their homes for the most part of 2002.

Marine product exports grew by 2.32 per cent with tuna leading at 21 per cent thus pushing the sector's performance despite the marginal performance of shrimps and other fish products (0.49 per cent) and cushioning the decline in seaweeds and carageenan exports (-8 per cent).

"Competitive pressures and supply chain difficulties largely influenced our exports in this sector," Roxas said.

Roxas added that the 3 per cent decline in sales to the U.S. was offset by the huge growth in China, Malaysia and other Asian market.

Exports to China grew by 71 per cent; Malaysia, 49 per cent; Hong Kong, by 48 per cent; Korea by 28 per cent; and Taiwan, 16 per cent.

"These growths were fueled by the pivotal role our electronics business plays in the global supply chain," Roxas said.

Roxas added that the processed food exports into China were also a significant driver in light of growing market acceptance of imported branded goods by Chinese consumers.

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