Are we going to get hurt badly because of US recession? It’s so easy to worry about that especially that we sell lots of stuff to the US market. But time has changed.
Ten years ago, electronics and semiconductors accounted for only 42 percent of the country’s exports with farm-based products like coconuts, pineapples, bananas, tuna, seaweeds, and baskets having significant percentages. Today, manufactures account for 86 percent of the country’s exports, the bulk of which are electronics and semiconductors. Farm-based products now account for only 4 percent.
Ten years ago, 36 percent of our exports were purchased by the Americans, such that we would always a catch cold, nay influenza, when America sneezed. When combined with our exports to Japan, Netherlands, Hong Kong, Great Britain and Germany, more than 70 percent of our exports were purchased only by seven countries. China and India were not even listed among our markets.
Today, America only accounts for 18 percent of the country’s exports. China is now our third largest market next to Japan. Suddenly we can see our friends in the Asean buying about 17 percent of our products. The rest are accounted for by Europe and the rest of the world.
What we see here is a diversifying export market for Philippine products, a trend that should lessen our vulnerability to external shocks. And yes, the World Bank, it seems, has taken an optimistic note on the Asia Pacific Region, including the Philippines.
I’m trying to be optimistic here, of course. China ultimately sells to the US. Once the American orders for Chinese goods are down, so the Chinese orders from us will probably be. This is still an interconnected world.
But let us see, because even in the US experts don’t agree on the extent of the recession. And here in the local front, the National Statistical Coordination Board has yet to report to us the whole 2007 performance. The numbers would surely be good, considering we had good numbers from the farm sector. But the enthusiasm will surely be dampened by the sobering thoughts about the recession. So let’s wait on January 31, the official announcement of the 2007 growth rate, what the experts will say.
Meantime, you may read the take of Finance Secretary Margarito Teves by clicking here.