Philippine Export Growth Slows as Electronics Decline

By Francisco Alcuaz Jr. and Clarissa Batino

July 10 (Bloomberg) -- Philippine exports rose at a slower pace in May as slowing global growth damped orders for the country's disk drives and mobile-phone chips.

Shipments abroad rose 2.3 percent from a year earlier to $4.22 billion, compared with a 4.9 percent gain in April, according to preliminary figures released by the National Statistics Office in Manila today. The median estimate of 13 economists in a Bloomberg survey was for a 4.5 percent increase.

``The global headwinds are undeniable and it's making the export sector quite vulnerable,'' said Vishnu Varathan, a regional economist at Forecast Singapore Pte. ``Demand for electronics isn't looking good.''


Asian nations face weaker economic expansion this year as a slowdown in the U.S. hurts demand for electronics produced by Intel Corp., Texas Instruments Inc. and other manufacturers in the region. The Philippine government said yesterday it may cut its 2008 growth target for the second time this year.

Overseas sales account for about two-fifths of the Philippines' $118 billion economy, which grew at the slowest pace in six quarters in the first three months of the year. The International Monetary Fund forecast in April that world growth would ease to 3.7 percent this year from 4.9 percent in 2007.

``Growth in the U.S. has weakened, slowing demand for products and we're seeing the same slack in orders from Japan and Europe,'' said George Worthington, chief Asia-Pacific economist at Thomson IFR in Sydney.

Electronics Sales

Estimates for May exports in the Bloomberg survey ranged from a decline of 2 percent to growth of as much as 9 percent.

Sales of electronics, which make up two-thirds of the Philippines' total exports, fell 3.4 percent to $2.47 billion in May from a year earlier.

Exports to the U.S., the Philippines' biggest overseas market, advanced 2.7 percent to $676 million. Shipments to Japan, the No. 2 destination, added 22 percent to $665 million.

Shipments to China climbed 8.6 percent in May from a year earlier to $502 million. Exports to Hong Kong fell 23 percent to $396 million.

To contact the reporters for this story: Francisco Alcuaz Jr. in Manila at falcuaz@bloomberg.net; Clarissa Batino in Manila at cbatino@bloomberg.net