Exporters urged to be wary of the slowing US economy

Exporters are encouraged to brace themselves for the further weakening of the US economy and told to focus on domestic investment such as in service sector, construction, banking, as well as tourism.

Mike Moran, senior economist for Standard Chartered Bank, based in Hong Kong, suggested that exporters have to temporarily shift their attention to strong domestic investments, rather than fully depend on exports.

During the recent Economic Review and Outlook Session, hosted by Standard Chartered Bank for its clients in Cebu, Moran warned that exporters will expect a slowdown of demand from the US market, as well as other big export markets in the Philippines.

He said the US economy is slowing down, affected the export performance in the Philippines. Likewise, market in Europe is also expected to post slumber growth.

However, he said every country that serves the big economies like US and Europe shall also experience a slowdown in export demands, not only the Philippines.

Moran said exporters have to start investing some of their money on the domestic setting. He suggested banking, construction, service sector, and tourism are best shots for investments today.

In the last few months, the money supply has improved. Making the banking sector posts healthier gains. The Philippines also have seen various expansion projects from investors, "construction sector is vibrant here," Moran said.

He said the global demand especially from the US is retrenching. In the Philippines for instance, in the last few months, export figures struggled to maintain growth to 10 percent that is for the reason that he suggested for temporary shift of business or investment preference. But not necessarily dump export business.

He just hopes that the current political issue against the Arroyo-administration will quickly be resolved, so that the country's economic recovery to soon by achieved.

"If the Philippines could navigate the recent political 'stones', there is no reason why the country's economy will not strengthen in the next few months," Moran said.

Moran who is an in-house economist for Standard Chartered Bank in the Asian region, said he has noted a positive sign in domestic consumption in the Philippines.

Even outsiders, the investors who are looking at the Philippines, have considered the country's economy as improving, tagging the Philippines to have a "strong reform story", Moran stressed.

Standard Chartered Bank is holding annual economic review to help its clients effectively plan their investment decisions for the future.