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Philippine exports fall for first time since 1994

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November 7, 2000 

MANILA (UNB/AP) - Philippine exports declined in September for the first time in nearly six years, dragged down by a large drop in shipments of electronics and components, the government said Monday.

Economists fear an extended period of weak exports will lower growth in an already faltering economy.

But while growth in electronics exports has been declining in recent months, analysts attributed much of September's drop to unusually high exports late last year caused by Taiwanese companies shifting production to the Philippines after a severe earthquake in Taiwan.

Exports declined 5.2 percent to dlrs 3.502 billion in September from dlrs 3.693 billion a year earlier, the statistics office said.

While export growth has been sagging in recent months, this is the first actual decline in exports since November 1994.

Orion Squire Capital Inc. research head Hazel Flores said September's export performance was "alarming" as it signals a slowdown in the economy.

Other economists believe another quarter of weak exports will make it highly likely that the government will miss its 4 percent to 5 percent economic growth target for the year as growth is heavily dependent on the export sector.

Indeed, many believe the target is already beyond the government's grasp, with Barclays Capital predicting growth of 3.5 percent in 2000 and only 2.75 percent in 2001.

Exports of electronics and components, which accounted for close to 62 percent of total shipments, fell 15 percent to dlrs 2.163 billion in September from dlrs 2.543 billion in the year-earlier month. Electronics exports rose 9.9 percent in August on year.

Weakening global demand for computers and computer-related parts and products is expected to have a major impact on countries exporting these products, such as the Philippines, Taiwan, South Korea and Malaysia.

"We don't expect electronics exports to recover because of this trend," said Abacus Securities Corp. economist Jun Neri.

Indeed, the medium-term outlook for Philippine exports isn't bright. Although the weak peso should buoy revenues in the coming months, the impact of higher oil prices, the weak euro making Asian products more expensive in Europe, Japan's shaky recovery and the specter of a global downturn in demand for electronics will likely damp export growth.

The government announces import figures separately each month.