December exports rise at fastest pace in more than a year

Exports rose in December at the fastest pace in more than a year as companies shipped more computer parts and other electronic goods.

The National Statistics Office (NSO) reported yesterday overseas sales gained 16.8 percent to $3.83 billion in December from $3.277 billion in the same period in 2004,

That was the fastest pace since November 2004. Export earnings tumbled 1.6 percent in November last year.

"This is the start of a recovery of exports as the electronics sector is picking up," said Luz Lorenzo, an economist at ING Bank. "My outlook is for a faster exports growth this year."

However, for the whole of 2005, the country’s export earnings grew by a slower 3.89 percent to $41.223 billion in 2005 from $39.680 billion in 2004.

The 2005 growth figure was lower than the four percent export growth target of the government. The BSP lowered its export projection for 2005 from six percent to only four percent on the back of lower shipments of electronic products. The BSP had earlier expected exports to increase eight percent in 2005.

President Arroyo is counting on exports to spur economic growth to as much as 6.3 percent this year from 5.1 percent in 2005.

The government expects overseas shipments, which account for about two-fifths of the $85 billion economy, to expand this year at the same 10 percent pace reported in 2004.

Sales of computer parts and other electronic goods increased for a third month in nine, expanding 15.7 percent to $2.6 billion. These products account for about two-thirds of the country’s total exports.

Exports to the U S, the biggest overseas buyer of Philippine products, rose 47.7 percent to $755.9 million. Sales to Japan, the second-largest market, increased 2.4 percent to $647.36 million.

Local electronic makers expect orders from abroad to rise this year, driven by demand for laptops, televisions and Apple Computer Inc.’s iPod digital players, said Arthur Young, president of the Semiconductor and Electronics Industries of the Philippines.

"We are seeing a strong 2006," said Young, president of PSi Technologies Inc., a computer chips maker. "Growth will be driven not just by the computer sector but across all products like high-definition TVs, iPods."

Electronics exports may grow 10 percent this year, led by sales of semi-conductors, which account for about 75 percent of the sector’s total sales, Young said. Semi-conductors, mostly computer chips and other components, will rise as much as 15 percent this year, he said.

Last year, electronic exports grew 2.2 percent, less than the five percent forecast of Young’s group, today’s report showed. In 2004, overseas sales of electronic expanded 10 percent.

The decision of Toshiba Corp. and Matshusita Electronic Industrial Co. to shift their operations to China contributed to the slowdown in exports in 2005.

Matsushita Electric, the world’s largest electronics maker, closed its mobile-phone assembly factory in the Philippines in December. The closure is part of Matsushita’s decision to stop producing so-called second-generation phones and focus on third-generation of 3G phones, which will be made in China.

Toshiba in 2004 moved notebook assembly operations to China from the Philippines. That cost the country as much as $1 billion of exports a year, according to the Semiconductor and Electronics Industries of the Philippines Association.

"There are no big pull-outs this year and we are expecting foreign investments,’’ Young said. "We are fairly confident 2006 will be a banner year based on what we are seeing today."