BSP upbeat over stronger exports

The Bangko Sentral ng Pilipinas (BSP) expressed optimism yesterday that exports would perform better than expected this year as global demand for semiconductors and electronics products has started to pick up.

Exports are projected to grow by eight percent this year, but BSP officials said indications are this growth rate would be easily achieved and maybe even surpassed.

The BSP said in its first quarter balance of payments report that exports recovered strongly in the first quarter, going up by 14.2 percent to $10.7 billion from $9.9 billion last year.

The surge, according to the BSP’s Department of Economic Affairs (DER) was due to the growth in electronics exports, mainly semiconductor parts which account for 73 percent of the country’s electronics exports.

DER director Iluminada Sicat told reporters that the acceleration in electronics exports was fueled by the global pick up in demand for consumer electronics such as mobile telephones, digital cameras, music players and the like.

Sicat said there has been a slow build-up in the global book to bill ratio which represents the proportion of orders versus actual shipments. A one-to-one ratio is an indication that the demand and supply for electronics is evenly matched.

"Right now the ratio is over one, somewhere around 1.2 to one," she said. "This tells us that there is a pick-up in demand and we expect that to translate into higher exports for us."

Aside from the gathering strength of the electronics sector, Sicat said the garments sector is also showing remarkable performance after the industry lost its import quota allocations from countries like the US.

"The strategy they adapted is to shift to high-end branded products," Sicat said. "As a result, they managed to post growth in the first quarter."

Another dark horse, according to Sicat, is business process outsourcing (BPO) which caused the surge in the export of services.

The BSP is currently reviewing all its projections and targets in preparation for the annual performance review by the International Monetary Fund (IMF) in July.

In the first quarter, however, income from BPO operations such as call centers caused a surge in the country’s current accounts in the first quarter of the year and pushed up the balance of payments surplus.

The BSP reported that the country’s current account for the first three months of the year posted a surplus of $1.17 billion, equivalent to about 4.4 percent of gross domestic product.

BSP Deputy Governor Diwa Guinigundo said this was a 59-percent growth from the year-ago level of $733 million, due mostly to higher inflows from remittances, portfolio investments and the surge in the services exports.

Total exports of goods for the first quarter, according to GUinigundo, grew by 14.2 percent to $10.69 billion due to higher shipments of electronics and garments.