Exporters unfazed by US crisis but fear impact on other markets

CEBU, Philippines - The Philippine export industry is not threatened by another economic crisis faced by the United States, unless the financial instability will spread to other major markets such as Europe, China, and Japan.

PhilExport president and chief executive officer (CEO) Sergio Ortiz-Luiz Jr. said that after the recession, the Philippine exports have developed strong connection with other major markets, in fact latest figure showed that the country’s exports to US went down from 34 percent to 12 percent.

Surprisingly, he said the June 2011 data showed that Japan is now the number one export market of the Philippines, followed closely by US and China.

However, what happened to the US now should also be monitored well, as its economy is too big and strong that it may affect other economic giants like China.

“But it looks like it’s not affecting other markets [yet],” he said emphasizing that the Philippine foreign exchange also is one of the important factors that should be considered, and exporters are hoping that exchange rate will remain stable.

While the export sector is still adjusting from the different crises it faced in the last few years, including the US recession, the unrest in Middle East, and calamity in Japan, electronics exports showed negative performance in the first semester of this year. Although he said players are confident that it can grow by at least 10 percent in the last two quarters for this year.

In the year-on-year comparison that Philippine export sector only grew by three percent, a slight shortage of the industry’s projection of growing 10 percent this year.

Nevertheless, Ortiz-Luiz said the sector is not downgrading its target of growing 10 percent this year, as the projection in the next few months is seen to be promising.

In an interview, the PhilExport head said that aside from China, Japan, and Europe, the Philippine export is also getting its confidence from the growing market in Asia.

He said the Philippines is now growing its business within the Asian market, and this may offset the decline of orders coming from the US.

Last year, because exporters considered it as “recovery year”, the industry grew by 25 percent, and exceeded the target of 20 percent growth set by the industry players in 2010.

Despite the slow pace of growth seen in the first six months this year, Ortiz-Luiz is confident that the 10 percent target growth is achievable, if the positive trend will continue. (FREEMAN)