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NEWS UPDATES 11 September 2009

Philippines’ exports down for 10th month

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Sales abroad of Philippine-made goods contracted further due to the continued drop in electronic shipments, but job-generating foreign direct investment (FDI) as well money invested in peso-denominated financial assets improved, according to separate announcements by government agencies, the Manila Times reported.

The National Statistics Office (NSO) said export earnings fell 25.4 percent to $3.321 billion in July from $4.437 billion in the same month last year. This was the 10th consecutive month of decline since the global financial crisis hit the country.

Exports in the first seven months this year fell 31.7 percent, or higher than the government’s target of a 15-percent contraction for the full year.

Various pundits said Philippine exports are unlikely to recover strongly in the near term due to the high current account deficit in the US, which is the biggest export market of Manila and its Asian trading partners.

Electronics, which accounted for 57.8 percent of the total revenue in July, fell by 25.2 percent from $2.560 billion in the same month last year.

The NSO blamed the decline on the 24.8-percent annual decrease in semiconductors, which comprised 42.8 percent of the total exports.

Month-on-month, electronics shipments however increased by 5.8 percent from $1.340 billion in June.

Sales to the US reached $583.75 million, or 17.5 percent lower than the $707.43 million recorded a year earlier. Shipments to Japan reached $550.19 million, or 21.3 percent lower than the $698.73 million last year.

Separately, the Bangko Sentral ng Pilipinas (BSP) said FDI rose by 47.4 percent to $892 million in the first six months compared with $605 million in the same period last year, as foreign entities reinvested their earnings on top of making additional investments.

The first-half figure is higher than the BSP’s full year projection of $700 million.

“This reflected favorable investor sentiment given the emerging outlook on improving global economic conditions,” BSP Governor Amando Tetangco Jr. said.

These investments came from the US, Japan, Hong Kong and The Netherlands and were directed mainly to the manufacturing, real estate, construction, services, financial intermediation, mining and trade/commerce sectors.

For June alone, FDI posted a net outflow of $133 million, mainly on account of inter-company loan repayments.

The BSP also announced that foreign portfolio investment (FPI) yielded a net inflow of $182 million in the first eight months, a reversal from the net outflow of $446 million in the same period last year.

“Improving business and consumer confidence brought about by encouraging domestic macroeconomic fundamentals such as declining inflation, easing interest rates and robust remittances by overseas Filipinos, contributed to the upbeat investor sentiment on the Philippines,” the BSP said.

Eighty-one percent of the FPI came from the US, the United Kingdom, Japan, Singapore and Luxembourg.

Month-on-month, FPI, however, registered a net outflow of $82.91 million compared with $65.87 in July this year. About 88 percent of the $384 million inflows in August were placed in Philippine Stock Exchange-listed shares while the balance was lodged in peso-denominated government securities.


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