Philippines says exports to be flat or down in 2011

MANILA: The Philippines' exports will likely be flat to slightly down this year, weaker than a previously downgraded 5 percent growth goal, putting at risk its overall 2011 GDP growth target, a senior government official said on Monday.

Manila's downwardly revised GDP growth goal of 4.5 to 5.5 percent this year had assumed exports would post modest growth despite the economic and market turmoil worldwide.

But slowing demand for the country's key electronics and semiconductor products, accounting for about half of total shipments, was dampening overall exports, Trade Secretary Gregory Domingo said.

"Based on my conversations with them (electronics industry), they said that recovery will not happen until the first quarter. So for the rest of the year, their prognosis is further weakness in the electronics sector," Domingo told reporters on the sidelines of a business forum.

Exports, which account for about two-fifths of GDP, recorded its sharpest fall in 2-1/2 years in September after a huge decline in electronics shipments as global demand weakened.

ELECTRONICS EXPORTS

The industry group Semiconductors and Electronics Industries in the Philippines Inc (SEIPI) has forecast an 18 percent fall in exports of the sector this year, worse than an August estimate of a 5 percent annual drop.

Last week, Economic Planning Chief Cayetano Paderanga said the country's full-year growth target looked "achievable," with annual third quarter growth expected to reach more than 4 percent, faster than the previous quarter's 3.4 percent, boosted by a robust services sector.

Official third quarter GDP data will be released on Nov. 28, two days before the central bank meets to review policy rates.

Despite signs of slowing domestic growth, monetary authorities have said they have monetary and fiscal flexibility to support growth in the face of a deteriorating global economic outlook.

In a Reuters poll in October, analysts forecast GDP growth in the Philippines to ease this year to 4.3 percent, slightly lower than the government's goal, and supporting views the central bank will keep interest rates steady at least until the early part of 2012.