Philippine exports plunge, underscoring growth worries

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MANILA, Nov 10 (Reuters): Philippine exports contracted sharply in September as global demand weakened across the board, and the electronics industry said prospects for the country's main shipment remained bleak due to world economic turmoil. Exports fell 27.4 per cent in September from a year earlier -- the sharpest fall since shipments since April 2009 when the global financial crisis had pushed many economies into recession -- and underlined the shift in policy focus from containing inflation to supporting growth. Each of the country's top 10 export markets, covering Asia, Europe and the United States, weakened in annual terms -- with exports to Singapore, the fourth-largest market, plummeting nearly 77 per cent. "It is now even more compelling for the government to exercise its flexibility in stimulating the economy now that the external markets are clearly weighing on local economic prospects," said Jun Neri, an economist at Bank of the Philippine Islands. "There's a lot of scope to make up for the underspending in the early part of the year, as well as really providing a necessary swing in expenditures to get the economy into a more stable growth path," Neri added. Exports, which account for about two-fifths of gross domestic product, fell for the fifth month in a row, and Governor Amando Tetangco said the central bank would consider weak trade numbers when it reviews the policy next month. "We will consider this, as well as other political developments in Europe that continue to bear on the financial markets, during our policy setting meeting at the beginning of next month," Tetangco told the reporter in a text message. Electronics shipments, the country's top export item, plummeted an annual 47.9 per cent, their biggest annual fall since January 2009, and the Semiconductors and Electronics Industries in the Philippines Inc (SEIPI) said a turnaround was unlikely before the end of the year. "Consumer spending on technology is picking up but industrial spending on technology is not moving," SEIPI President Ernie Santiago told the reporter in a phone interview. "The market is weak because of the global economy, because of the US and European debt crisis," he said. SEIPI has forecast an 18 per cent drop in electronic and semiconductor exports this year. Shipments to Japan, the country's top export destination in August, fell 11.7 per cent in September from a year earlier. Exports to the second and third top markets, China and United States, fell 18.5 per cent and 7.1 per cent respectively.