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Gov’t-backed group sees exports to contract 7%

03/16/2009

After factoring in the impact of the global recession, the semi-government Export Development Council (EDC) this week projected a negative seven percent growth in exports for the whole of this year.

But it made a fighting target of 16 percent growth next year if and when the government makes good its commitments to back with funding the last two years of the three-year Export Development Plan.

When President Arroyo approved the export plan last year, she promised in principle a national government subsidy of P1 billion to make the plan work.

In its revised export target this year, a copy of which was obtained by the PNF, the EDC conceded that the electronics industry that make up more than half of all exports will suffer a 10 percent retreat from last year’s performance, with target sales of $25.6 billion

But next year, EDC has targeted a 10 percent rebound for electronics and semi-conductors valued at $28.2 billion. This was premised on the assumption that the recession in its major markets, the US, Japan and Europe, shall have bottomed out by the end of this year.

The country’s number two export, automotive parts, is seen by EDC to experience zero growth this year on revenues of $3 billion, but will bounce back next year by two percent on the back of targeted sales of $3.06 billion.

The third top export, garments, was seen to dive by 25 percent this year from $2.29 billion in export sales last year to $1.72 billion. Seventy percent of Philippine garments end up in the United States.

Next year, the EDC made a fighting target of 3 percent growth for garments with projected sales reaching $1.77 billion.

Fresh, frozen and processed food, the country’s fourth biggest export product, was seen to defy the global slowdown and will post a 10 percent growth on the back of double-digit growth in tuna and other fishery exports this year with $2.5 billion in targeted export sales.

EDC sees an even heftier growth in food exports next year with marine products seen to push up sales by 40 percent, fresh fruits led by bananas, pineapple and mangoes at eight percent, and processed food at 10 percent spikes.