Philippine Export growth rises to 19% $4.3 Billion in April 2011

Business & Economy: Philippines - Merchandise exports rose by an annual 19.1 percent in April 2011, their fastest growth rate this year, as shipments to Japan remained strong despite the natural and nuclear disasters there,  as announced by the Govt last Thursday June 9, 2011.

The Philippines’ export bill rose to $4.3 Billion Dollars in April from $3.611 billion a year ago, after the 4.1 percent annual rise in March, data from the National Statistics Office showed.

Month on month, however, April exports were down 1.2 percent from March’s $4.353 billion.

Electronics shipments, which dominate exports, fell 2.1 percent from last year, the third successive monthly decline. Electronics made up 49.9 percent of April revenues.

Exports to Japan, the country’s top market during the month, rose 20.2 percent in April to $741.88 million. Exports to the United States, the second-biggest export destination, were down 1.3 percent from a year earlier.

Analysts said the crisis in Japan had affected trade, but the impact was limited so far, and strong growth levels are expected later this year.

“While the electronics sector suffered from the supply chain disruption following the

Japan’s earthquake... non-electronic exports have seen strong performance,” said Vincent Tsui, Standard Chartered Bank economist.

“This reflects the impact of Japan’s earthquake on headline economic growth to be much moderate, with limited impact on net exports, and trade performance set to rebound in the upcoming months as Japan’s manufacturers gradually report restoration of production facilities, this should support revival of processing trade in electronic products going forward.”

“Surprisingly, exports to Japan climbed 20.2 percent year-on-year, though slipped on the month, and we expect the slowdown in purchases from the key export destination to reflect in the rest of the quarter,” added Radhika Rao, economist at Forecast Pte, Singapore.

Exports are estimated to climb between nine percent to ten percent this year, and 12 percent next year. Imports are expected to rise 17 percent to 18 percent in 2011, and 18 percent in 2012. Exports grew 34 percent and imports 27 percent in 2010.

The Semiconductor and Electronics Industries in the Philippines is still hopeful of hitting at least the lower end of its export growth target of eight percent to 12 percent this year, but the head of the industry group has said it would be difficult to achieve.

The Philippines provides about 10 percent of the world’s semiconductor manufacturing services, including for mobile phone chips and micro processors.

Other top Philippine exports include garments and accessories, wood furniture, vehicle parts, coconut oil, and tropical fruits.

Exports account for about two-fifths of the country’s gross domestic product (GDP), based on expenditure terms.

 

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Net Foreign Direct Investment Inflows surge 142% in March 2011 - Banco Central

The Banco Central Sa Pilipinas / Bangko Sentral ng Pilipinas (BSP) reported  June 9, 2011 that net foreign direct investment (FDI) inflows surged 142 percent in March as equity infusion more than doubled while withdrawals declined.

BSP Governor Amando Tetangco Jr. said that net FDI inflows amounted to $167 million Dollar in March or $98 million lower than the $69 million inflows booked in the same month last year.

"All FDI components yielded positive balances during the month," Tetangco stressed.

Data showed that equity placements jumped 113 percent to $64 million Dollar in March from $30 million in the same month last year while withdrawals slowed down by 47 percent to $18 million from $34 million.

The net inflow of other capital account consisting largely of intercompany borrowing between foreign direct investors and their subsidiaries or affiliates in the Philippines jumped 146.2 percent to $96 million in March from $39 million in the same period last year while reinvested earnings fell 26.5 percent to $25 million from $34 million.

In all, Tetangco said net FDI inflows retreated by 16.6 percent to $471 million in the first quarter of the year from $565 million in the same period last year due to the tensions in Middle East and North African (MENA) states, the debt crisis in Europe, and the disasters in Japan.

"Investors remained cautious on account of the uncertainties brought about by the ongoing sovereign debt problems in Europe, the political unrest in the MENA region as well as the disasters that struck Japan," the BSP chief stressed.

Equity placements retreated by 7.6 percent to $121 million from January to March compared to $131 million in the same period last year while withdrawals plunged 53.5 percent to $40 million from $86 million.

Data showed that reinvested earnings plummeted 38.3 percent to $113 million from $183 million while other capital fell 17.8 percent to $277 million from $337 million.

FDI inflows retreated by 12.7 percent to $1.71 billion last year from $1.96 billion in 2009 as equity placements plunged 42.5 percent to $1.15 billion while equity withdrawals increased by 10.8 percent to $307 million.

The drop was attributed to the decline in equity capital investments in new and existing projects as investor sentiment was generally marked by cautiousness and uncertainties surrounding the sovereign debt crisis in some parts of Europe, geopolitical tensions in Korea, asset price bubble and overheating concerns in fast growing emerging markets.

Likewise, the BSP explained that large-scale investments arising from the privatization of a local power corporation and the acquisition of shares of a local beverage manufacturing firm were recorded in 2009.

These included the investment made by China's largest electricity provider State Grid Corp. and Monte Oro Grid Resources Corp. in state-owned National Transmission Corp. (Transco) that bagged a $3.95 billion concession contract as well as the decision of Japanese brewer Kirin Holdings to acquire a stake in Manila-based San Miguel Brewery of diversified conglomerate San Miguel Corp. worth ₱ 65.8 billion.

Monetary authorities are confident that FDIs would continue to pour into the Philippines to fund projects under the Aquino administration's public private partnership (PPP) scheme.

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