Philippine exports growth weaker in 2008 on US worries, high energy prices

MANILA (Thomson Financial) - Philippine merchandise exports growth this year is likely to be weaker on a further slowdown in the US economy, high energy prices and the continued strengthening of the peso, an industry leader said Tuesday.
"Exports contributed very little to national economic growth last year, and we are seeing very little growth, if any for 2008," Sergio Ortiz-Luis, president of the Philippine Exporters Confederation or Philexport said at an energy summit here.
In the first 11 months of last year, exports rose just 4.8 percent from a year before. The reduced target for the whole year is 8 percent.
Electronics exports, which accounted for 61.3 percent of total export earnings in November, fell to 2.42 billion dollars from 2.54 billion dollars a year earlier.
The Semiconductor and Electronics Industries in the Philippines or SEIPI said it is also bracing for a difficult year.
"We are anticipating demand to be weak in the first half of the year. We are just hoping that growth will, at best, be flat and won t get any worse or be negative," said SEIPI executive director Ernesto Santiago.
With exports last year weighed down by "a triple whammy of high electric rates, historic oil prices and a strong peso, nine percent of the country s exporters closed shop last year," said Luis of Philexport.
"While a recession in the US will be a drag on exports in the short-term, it is the high cost of power, triggered by a surge in crude oil prices, that has drastically eroded the viability of the exports sector," said Luis.
Electricity expenses make up about 15 percent of production costs of export manufacturing enterprises in the Philippines.
World oil prices were slightly higher Tuesday in Asian trade, hovering near 90 dollars in a market focused on the fate of the US economy.
Luis said the Philippines has one of the highest electricity rates in Asia, next only to Japan.
The country s two biggest group of exporters have been urging the Philippine government to take more concrete steps to make electricity prices more competitive.
"We hope that the government can seriously consider the exporter s plight. There is a need to address the issues of electric power quality and security, in addition to developing and tapping alternative or renewable energy sources," said Luis.
(1 US dollar = 40.69 pesos)
rocel.felix@thomson.com
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