Exports in ecozones getting stronger

According to IDEA’s Industry Trends, one of the many publications of the Institute for Development and Econometric Analysis, Inc. (IDEA), export sales in economic zones reached $9.464 billion for the first quarter, up by 48.8 percent than the last year’s first three months’ sales. Sales of entities in private economic zones grew by 52 percent, while those from public economic zones increased by 54.8 percent. Also, it reported that exports receipts in February amounting to US $ 3.567 billion grew by a strong 42.3 percent from the same period last year, following the 42.5 percent increase in January. The double-digit growths were complete reversals from 2009’s contractions of 40.6 percent and 39.0 percent in January and February, respectively.

Furthermore, earnings from Manufactures, which accounted for 87.8 percent of total exports, swelled by 45 percent, with component Electronic Equipment and Parts taking the lead in terms of growth at 44.5 percent. This robust growth was offset, however, by drastic declines in other major components; Garments and Machinery and Transport Equipment dropped 90.7 percent and 52.8 percent, respectively. While on the other hand, agro-based products took the next spot in terms of increase as earnings stepped up by 33.2 percent to US$ 185.769 million. February this year saw the second month of expansion following months of contractions starting October 2008. Revenues for this period were, however, lower than January’s US$ 210.434 million.

      Likewise, per same published report revealed that Mineral Products took a 10.9 percent fall, following the preceding month’s 15.4 percent contraction. Forest products, meanwhile, decelerated to 17.7 percent growth from the 59.8 percent increase recorded in January. Japan was the top destination of exports, followed by the United States and Singapore. Export figures have shown improvement, an indication that global demand is regaining strength following the prominent slump experienced in 2009.

However, caution must be applied in looking at the figures, however, as the robust increases might be attributable to base effects. Moreover, recovery of affected economies normally starts with re-stocking of inventories, thus explaining the mounting demand at the start of the year. Nonetheless, there is optimism that the exports market is on its way to stability. Weighing down prospects, however, are stalled global economic recovery and the strengthening peso.

It was also reported that overnight borrowing rates remain at four percent, while overnight lending rates stay at six percent, after the Bangko Sentral ng Pilipinas (BSP) decided to maintain current policy rates amid higher inflation. BSP Governor Amado Tetangco Jr. explained that inflation is still within the targeted 3.5-5.5 percent of the central bank, even if projected inflation for the year was raised to 5.1 percent from the earlier estimate of 4.64 percent.

Lastly, a BSP survey revealed that more multinational companies engaging in Information Technology are possibly establishing their respective offices in the country, given the cheaper costs facing these firms. The survey further revealed that total industry revenues surged by 44.8 percent to $6.3 billion in 2008.

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