May exports surge 15% to 18-month high of $3.26B

The country’s exports surged to an 18-month high at $3.26 billion in May, raising hopes total exports would likely hit the government’s growth target of 10 percent this year.

The National Statistics Office (NSO) said yesterday the latest export figure was 15.3 percent higher than the $2.802 billion recorded in May last year.

For the first five months of the year, the NSO said that exports grew by 8.6 percent to $15.42 billion.

Shipments of key electronic products, which accounted for 66.4 percent of the May total, were up 18.7 percent to $2.16 billion.

This was the biggest gain in electronics exports since December 2002, the NSO said, putting to rest fears that the industry might remain in a slump after a disappointing showing last year.

Socioeconomic Planning Secretary Romulo Neri said the May figures showed total exports would likely hit the government’s 2004 growth target of 10 percent.

He attributed the upturn partly to "the current cyclical upturn in world electronics," with demand in this segment likely to remain strong this year.

Neri also said that "this development is consistent with international analysts’ predictions that consumer electronic products, such as DVD players, mobile phones, and computer laptops will remain strong this year."

Jose Vistan, research director of AB Capital Securities, said he expects exports to pick up even further in the second half of 2004 as political concerns ease in the wake of Mrs. Arroyo’s victory in the bitterly-contested May 10 elections.

"The May figures could be the start of a trend. We’ve been less competitive because of the political environment during the (election) campaign. The pick-up in May suggests renewed confidence as far as the manufacturing and export industries are concerned," Vistan said.

The business community had been worried by a possible victory for Arroyo’s main rival, opposition candidate Fernando Poe, a popular movie star and high school drop-out with no experience of government.

There were also fears that military factions might use the uncertainty over the election to try to seize power, resulting in lower investment and a fall in the peso before the May polls.

"We should see better numbers in June and moving forward since the peso’s recovery should also encourage manufacturers to begin importing raw materials for export production," Vistan said.

The government statistics office also reported that garments remained as the country’s second biggest dollar earner.

Neri attributed the growth to the Garments and Textiles Export Board’s launching of the Garments Industrial Transformation Plan designed to help domestic manufacturers cope with the phasing out of quotas by January 2005.

The plan outlines initiatives to lower costs and improve productivity for garments and textiles traders.

"The plan recognizes the need for the domestic textile sector to become more competitive at the same time that tariffs on imported textiles are kept low," Neri said.

Machinery and transport equipment, the third largest export item, rose 25.8 percent due to a global surge in automobile and transport demand.

Exports sales of coconut products grew 2.9 percent, benefiting from the increase in world prices of coconut oil, which reached a record of $736 per metric ton (MT) in April 2004 from $685 mt in March. -- Ted Torres