Philippine exports up 33% in 2010

The Philippine  exports posted a 33.8 percent growth in 2010 to US$51.43 billion from $38.43 billion during the same period in 2009.

Total imports posted a 26.9 percent annual increase last year to $54.702 billion from $43.092 billion in 2009. The National Statistics Office (NSO) reported that the balance of trade in goods (BOT-G) for 2010 registered a deficit of $3.27 billion, lower than the $4.65 billion deficit in 2009.

Total external trade in goods in 2010 reached $106.13 billion, up by 30.2 percent from $81.52 billion registered during the same period in 2009.

Combined import and export merchandise trade for December 2010 was up by 25.8 percent to $9.13 billion from $7.25 billion in December 2009.

Total merchandise imports increased at 25.2 percent to $4.930 billion from $3.936 billion in December 2009. Total exports, on the other hand, rose by 26.5 percent to $4.201 billion from $3.321 billion in December 2009.

 The balance of trade in goods (BOT-G) in December 2010 posted a deficit of $729.00 million compared to last year’s recorded deficit value of $615.00 million.

Accounting for 34.6 percent of the aggregate import bill, payments for electronic products in December 2010 amounted to $1.706 billion, up by 35.3 percent from $1.26 billion in 2009.

Among the major groups of electronic products, semiconductors having the biggest share of 28.8 percent, expanded by 57 percent to $1.41 billion from $902.97 million in December 2009.

Imports of mineral fuels in December 2010 ranked second with 19.1 percent share and posted a positive growth of 23.7 percent to $940.95 million from $760.54 million in December 2009.

 Transport equipment the country’s third top imports for the month with 7.6 percent share to total imports at $373.61 million. The value accelerated by 77.7 percent from its previous year level of $210.20 million.

Industrial machinery and equipment contributing 4.8 percent to the total import bill, was the country’s fourth top import for the month with payments placed at $236.45 million, an increase of 18.5 percent from last year’s level of $199.51 million.

Fifth in rank and with 2.4 percent share of the total imports was iron and steel which expanded by 91.3 percent, the highest annual growth rate among the top ten imports to $116.83 million from $61.09 million in December 2009.

Chemicals ranked sixth, comprising 2.2 percent of the total imports, reached $106.08 million, higher by 27.2 percent from $83.37 million recorded in December 2009.

The other top imports for December 2010 were telecommunication equipment and electrical machinery worth $104.35 million, up by 41.8 percent; plastics amounting to $99.42 million increased by 46.5 percent; metal products valued at $67.06 million higher by 46.7 percent; and fertilizer with purchases placed at $64.28 million rose by 80 percent.

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Abaca fiber exports to grow 10% in 2011

The Philippine Fiber Industry Development Authority (FIDA) is forecasting a 10 percent growth in abaca fiber exports to 12,300 metric tons (MT) for 2011 from last year’s 11,175 metric tons.
FIDA administrator Cecilia Gloria Soriano is optimistic that full recovery of the export market for abaca could be achieved this year.

The abaca industry has already shown recovery as evident in the significant improvement in the exports of abaca fiber and other abaca-based products last year, as economic growths of importing countries have started to regain momentum.

Total abaca fiber exports in 2010 were projected at 11,175 MT, surpassing by 11.8 percent FIDA’s forecast for the year of 10,000 MT.

January to November shipments of 10,242.67 MT were already 75.6 percent higher than 5,832.2 MT total during the same period of 2009.

Soriano said the biggest markets abroad for Philippine abaca fiber are the United Kingdom and Asian countries especially Japan, China and Indonesia.

Likewise, the country’s shipments of abaca pulp are projected to reach 22,000 MT this year while abaca cordage at 7,700 MT.

Total export revenues from these commodities are estimated at $107.3 million. some specialty papermakers abroad have shifted to the importation of abaca pulp instead of the usual raw fiber because pulping is highly polluting that it harms the environment.

“The stringent anti-pollution control laws in their countries require them to put up anti-pollution control mechanisms which they consider costly,” FIDA said.

China, one of the biggest tea-drinking populations in the world, has been continuously expanding its imports of abaca pulp from the Philippines for the manufacture of tea bags.

Aside from tea bags, abaca pulp are utilized for the manufacture of specialty paper products for coffee filters, meat and sausage casings, currency papers, cigarette papers, filters, hi-tech capacitor papers and other non-wovens and disposables.

On the other hand, cordage, ropes and twines are used for oil well and gas drilling, for binding, tying and lassoing, building construction, fishing and shopping.

PAL hopes to settle dispute with union

The Philippine Airlines (PAL) management has expressed confidence of seeking a workable settlement on pending issues with the Flight Attendants and Stewards Association of the Philippines (FASAP) following an initial conciliation conference under the auspices of the Department of Labor and Employment (DOLE).

Both sides were given the opportunity to discuss their respective positions at length in a cordial atmosphere. “The end goal is to find an amicable solution to the issues being raised by our cabin crew union,” said PAL spokesperson Cielo Villaluna.

PAL President Jaime J. Bautista led the panel of airline officials who again met with FASAP officers, five days after FASAP filed a notice of strike at the Labor Department over alleged unfair labor practice.

A second conciliation conference, while PAL and FASAP are under a cooling-off period, has been set on Friday, Sept. 17.

Philippine exports surge 36% to US$4.5 billion in July

Philippines exports continued to surge in July with a 35.9 percent growth to US$4.5 billion, the National Statistics Office (NSO) reported.

Socio-economic Planning Sec. Cayetano Paderanga, Jr. said this is the ninth consecutive month that exports registered positive year-on-year growth since global trade recovered.

The growth was supported by increases in exports of manufactured goods (40.0%), total agro-based products (16.7%), mineral products (15.9%), and petroleum products (26.8%).

However, on a month-on-month basis, total merchandise exports declined by 1.2 percent from June 2010 as the pace of global economic recovery slowed down slightly, said Paderanga.

On a cumulative basis, export revenues in the first seven months of 2010 amounted to US$28.2 billion, 37.4 percent higher than the same period in 2009.

Sec. Paderanga said the considerable rise in the outward shipments of semiconductors (62.2%) followed the worldwide trend as global sales of semiconductors rose by a significant 37.0 percent.

There are opportunities for the industry to grow further even during slower economic growth due to the continued expansion of semiconductors  into a broader range of products.

Paderanga cautioned, however, that while outward shipments of semiconductors are still buoyant, the Semiconductor and Electronics Industry in the Philippines Inc. (SEIPI) expects this to slow down for the
rest of 2010.

But he noted that to further boost the electronics sector, SEIPI is crafting an electronics sector roadmap that will select technologies that the country should focus on, such as the export of solar energy. The roadmap is expected to be released in October 2010.

Exports receipts from coconut product reached its highest in two years, reaching US$156 million according to NSO.

“The doubling of the price of coconut products drove the increase in the commodity’s exports. With the soaring global demand for coconut products, we see its exports to remain strong through the year,” Paderanga said.

He cited the interview of an official from the Philippine Coconut Administration (PCA) who expects coconut product shipments to increase to 1.77 million metric tons in 2010, higher by 17 percent compared to 2009.

Coconut oil, the biggest component of the commodity group, grew by 72.5 in July 2010 from the same month a year ago.

The 74.2 percent export growth in copper metal propped up shipments of mineral products, offsetting declines gold and chromium ore exports.

“Backed by the 327.3 percent surge in Singapore’s orders of Philippine-manufactured semiconductors, the city-state remained the biggest buyer of Philippine exports for the second month in a row, with a 17.6
percent share in July,” Paderanga said.

Other major destinations for Philippine exports are the United States (16%), Japan (12.7%), Hong Kong SAR (9.1%), and PR China (8.8%).

Exports to the rest of ASEAN accounted for 26.6 percent of the value of the country’s total merchandise exports in July.

Semiconductors, electronic data processing machines, and garments accounted for 68.8 percent of the value of exports to the country’s five biggest markets in July 2010.

“The Philippines followed the double-digit export growth trend East and Southeast Asia with PR China registering the biggest increase at 38.1 percent. Other than the Philippines, Taiwan ROC (35.2%), Indonesia (29.0%),
and the Republic of Korea (28.3%) also posted stronger export growth in July relative to other countries in the region,” Paderanga said.

Appreciating Philippine peso hurts exporters

Exporters are compelled to slowdown operations as the peso appreciates, according to a survey by Philexport.

Sixteen of the 27 exporters who responded to the survey are forced to cut operations by 20 percent to 65 percent as the peso gains strength.

This is just one of the many painful adjustments that the country’s small and medium exporters have to make as the peso fluctuates from P45 to 46 against the dollar.

Alongside a slowdown in operations, nine exporters had to retrench workers by 15% to 60%.  About 18 exporters reported a narrowing of profit margins by three to 20%, aside from reducing their prices as buyers complained about rising prices of their products.

A company even decided to stop accepting orders until the peso hits competitive levels, the survey noted.

The peso-dollar exchange rate of P45 proves to be far below the exchange rate needed by exporters to maintain their price competitiveness which is in the range of P48 to P52 as indicated in the survey.

The exporters’ clamor for a competitive exchange rate has been made in light of the various competitiveness challenges of the country such as high shipping, labor, electricity and financing costs; limited access to finance, and poor infrastructure.

All of these translate to high production cost, marginal productivity gains and as a result, declining competitiveness that require a long time to address by both the government and the private sectors.

Survey respondents made a number of proposals to address the appreciation of the peso. These include supporting a competitive exchange as in other East Asian economies; putting up a foreign exchange stabilization fund and reducing the foreign borrowings of the country to obliterate the need to adopt a policy that is biased towards peso appreciation.

Meanwhile, as the value of the peso continues to appreciate, exporters, through the advocacies of the Export Development Council and the Philippine Exporters Confederation, Inc., are asking for further simplification and streamlining of bureaucratic procedures and documentary requirements, increased government support in export promotion and marketing and fiscal incentives to small and medium enterprises, particularly those outside the export processing zones.

First half Philippine exports up 37%

A hefty 37.7 percent rebound in Philippine exports for the first half of this year over the same period last year brought export earnings close to that in 2008.

In cash terms, the latest National Statistics Office (NSO) figures had shown that total exports from January to June 2010 of $23.711 billion topped by $6.5 billion the export performance first half of 2009 of $17.225 billion.

Deliveries in the third quarter of the year are expected to sustain the high growth path shown in the first half.

Historical experience during periods of growth indicated that buyers made bigger orders in this quarter for the expected surge for Christmas shopping.

Industry leaders have projected that if the high double-digit growth from January to June holds, total exports by the end of the year may come close to reaching figures in 2008, when total merchandise sales abroad hit $49.07 billion.

It is seen to range between $47 and $48 billion. Proven as top seller of the half-year period in review was coconut oil, surging at a hefty 184.46 percent in six months with over half a billion dollars in sales, and catapulting itself to over-all sixth placer among the country’s top 10 export goods.

Philippine exports peaked in the year 2007 when these reached a record high of $50.46 billion in revenues. It may take the industry another year of double-digit growth to stage a full recovery and surpass pre-crisis record.

 The latest cumulative figures for the first half of the year of recovery indicated that about two thirds of the country’s top 30 export commodities have followed the growth path, with Philippine tuna posting its first positive growth this year in the month of June.

While most manufactured goods including handicrafts have joined the recovery bandwagon, a number of the country’s leading farm and fishery export products continued to post negative growth for the first half of 2010.

Leading the losers were bananas whose sales declined by 30.30 percent below 2009 levels, followed by sugar that posted a minus 26 percent growth and pineapple which dropped by 18.86 percent.

Dessicated coconut was the fourth big loser in the first half of the year, sliding by 14.47 percent. Still struggling to join the winners were two groups of fishery products, shrimps and prawns which posted a 6.86 retreat and tuna which sold 4.21 percent less in the first half of this year compared to the same period last year.

Among the manufactured goods, footwear stood like a sore thumb as the lone laggard, registering a 68.22 percent decline in sales of only $4.4 million compared to the first half of last year when it hauled in $14 million.

Philexport raises export target growth to 25%

The Philippine Exporters Confederation (Philexport) has raised its export target growth for 2010 to 25 percent from 20 percent following the higher-than-expected growth in merchandise exports during the first half of the year.

“The average for the first six months is 35 percent and our projection for the whole year is only 20 percent. So we may have to re-calibrate our year-end projection because of this,” said Philexport president Sergio Ortiz-Luis Jr.

At least 25-percent average export growth for the year is possible, even if revenue figure declines to 20 percent in the remaining months of 2010.

“It is expected that exports will be going down towards the end of the year because it started very high,” Ortiz-Luis said.

 He noted that this year’s export growth drivers would continue to be electronics and services sectors and even some coconut and agriculture products.

Merchandise exports from January to June 2010 posted an increase of 37.7 percent to $23.71 billion from last years $17.22 billion, according to National Statistics Office (NSO) data.

June 2010 exports earnings registered a double-digit growth of 33.4 percent to $4.54 billion.

Electronic products, already accounting for about 64 percent of the total export revenue in June 2010, grew by whopping 49 percent to $2.9 billion. These were followed by articles and apparel and clothing accessories and coconut oil with total export earnings during the month reaching $152.4 million and $95.62 million, respectively.

Creation of Philippine trade negotiating arm

The government would soon have a permanent trade negotiating arm with the signing of a Senate committee report that helps facilitate the creation of a Philippine Trade Representative office.

A bill could be adopted by the Senators in the 15th Congress, cutting the long, tedious law-making process at least in the Senate, according to a source at the Senate technical staff.

Those who have been pushing for a permanent trade negotiating office endorse the current version already for adoption if this version meets their position. This will fasttrack the process.

Creation of such an office snowballed during the Arroyo administration when stakeholders saw that the government has had a piecemeal approach to negotiating trade agreements handled by different offices in government.

Negotiations on agricultural trade was led by the Department of Agriculture. Talks on Non-Agricultural Market Access (NAMA) was handled by the Bureau of International Trade Relations (BITR) under the Department of Trade and Industry while talks on trade in services was put on the laps of the National Economic Development Authority.

An ideal picture of the country’s trade policy and negotiation process and structure was also presented by Atty. Dorotea Lazaro, a key expert of the EU Trade Related Technical  Assistance project, in the same meeting.

The framework was seen as comprehensive and one that proposed the setting up of a permanent Philippine Trade Representative Office patterned after the permanent negotiating offices of the United States and the European Union.

The framework covered the whole negotiating process from background research and determination of trade policy to post-negotiations support services.