Exports seen dropping 30% this year

MANILA, Philippines - Exports are expected to decrease by up to 30 percent this year as consumer demand from the Philippines’ major markets are projected to drop further, an economist said yesterday.

In an interview, University of the Philippines (UP) economist Benjamin Diokno said that exports are expected to contract by 20 percent to 30 percent this year.

For instance, he said that the demand for electronics, which represents more than 60 percent of the country’s export, may go down given the changes in the components of computers.

“Computers now are getting smaller and the parts that they need are fewer,” Diokno explained.

Same goes with the automotive parts that the country exports, Diokno said. “If before Americans changed their vehicles every two to three years now not anymore,” he noted. Likewise, he said the trend for cars is changing.

He said that the demand now is for more environment friendly fuel efficient cars. As of the moment, the Philippines is not producing any parts for green vehicles. He said that the country must prepare for this by improving the exports.

But more importantly, he said the reliance on imports must be lessened. Diokno cited that the country can produce most of its food products instead of buying it from Thailand and other countries.

“Go to the supermarket and you will see that even our chips are sourced overseas. Maybe we can make our own in order to create jobs here also,” he noted.

Earlier, the Federation of Philippine Industries (FPI) said the government should require all infrastructure projects to be funded by the P330-billion stimulus package to use locally made products even if it means increasing the project cost by 25 percent.

FPI president Jesus L. Arranza said lawmakers are hesitant to include the Buy Pinoy Buy Local in the economic stimulus package because it might send the wrong signal to other nations that the Philippines is advocating protectionism.

“I talked to Malacanang and several congressmen and senators about this but they said we cannot do this because we are advocates of free trade,” Arranza said. “They are worried that there might be a backlash if we make buying local products a requirement.”

 He said the government is worried about the repercussions given because requiring firms to purchase local products would diminish the demand for imported products and would adversely affect income of nations exporting to the country.