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Saturday, January 28, 2006
Slow export, agri growth rates hurt economy
While remittances of overseas Filipino workers (OFWs) surged last year and strengthened the peso, the export sector’s growth fell below target.
The export sector increased only by four percent last year, lower than the expected 10-percent growth rate, said Makati Business Club executive director Guillermo Luz.
“This (export) is an important sector because next to the remittances of the OFWs, the export sector is a large foreign exchange earning source for us,” he said during the Microsoft Business Summit 2006 last Wednesday at the Waterfront Cebu City Hotel and Casino.
Decline
Philippine Exporters Confederation-Cebu executive director Fred Escalona said the sector’s growth slipped as a result of a decline in electronics exports.
“The country’s export sector heavily depends on electronics, which slowed down last year,” he said.
He pointed out that 70 percent of the P4-billion worth of exports in 2004 in Central Visayas came from the electronics sector.
The slowdown in the electronics sector was compounded by the transfer of foreign locators in the Philippines, like the Toshiba plant in Luzon, to other areas, such as China.
“The oil price increase also made consumers less optimistic. People who (used to) buy electronics are (now) more frugal,” Escalona said.
Oil prices
Luz noted that oil prices increased by 46.6 percent from January to December last year.
“There were over 30 price increases at the pump last year or one in every two weeks. As a result, inflation was up by 7.6 percent, (double the usual three percent inflation rate in previous years),” he said.
Escalona said, though, that the furniture industry remains to be a bright spot for the export sector, particularly in Central Visayas.
Luz also warned that the country’s agriculture sector posted a growth rate of only 1.8 percent last year compared to its eight-percent growth in 2004.
“If this sector slows down, it will affect the entire economy and increase poverty in the countryside as 30 percent of Filipinos derive their livelihood from the agricultural sector,” he said.
The government had blamed the decline in the agricultural sector’s growth on a drought.
Luz said entrepreneurs should help the sector by working with prime companies in training people and in providing technology, among others.
“Don’t rely on government agencies to do it. There’s too much bureaucracy and too many needs to address. We have to tackle our agriculture sector like an entrepreneurial exercise, not just a small-time livelihood,” he said. (ALC)
For Bisaya stories from Cebu. Click here. (January 28, 2006 issue)
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