Slower growth for exports MERCHANDISE EXPORTS grew at a slower pace in January, a development economists and industry officials said was a sign of normalizing markets following a 2010 rebound. Outbound shipments were up an annual 11.8%, a significantly slower rate compared to the 42.4% surge recorded in January last year, the National Statistics Office yesterday reported. In value terms the $4 billion earned at the start of this year was the lowest since April 2010. On a month-on-month basis, exports were down 4.8% from December’s $4.2 billion. Year-on-year growth during the final month of last year was 26.5%. Electronics remained the country’s top export with earnings amounting to $2.142 billion or 53.5% of total export revenues. Growth, however, slumped to just 5.3% from 51.2% a year earlier. Month on month, outbound shipments were down 5.1%. Apparel and clothing accessories, which comprised 4.1% of total exports, was the country’s second top earner in January at $162.35 billion. "The market is in a wait-and-see attitude on how economies will perform in 2011. But everything seems to be normalizing after the economic downturn two years ago," said Cid L. Terosa, economist at the University of Asia and the Pacific. "The growth this year may not be as good as last year’s. But it’s growth nonetheless." Philippine Exporters Confederation, Inc. (Philexport) President Sergio R. Ortiz-Luis, Jr. said, "We expected nothing extraordinary [for January] because we had gained what we lost in 2008 and 2009." Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) President Ernesto B. Santiago agreed, saying: "It’s normal growth." "Businesses will again normalize coming from a rebound from crisis years," he added. "It’s okay, we still see an upbeat year for exports." Both the Export Development Council (EDC) and the SEIPI said they expected to record slower growth this year from their 2010 targets of 25-30% and 20-25%, respectively. "The EDC projected a growth of around 11% [for 2011]," said Mr. Ortiz-Luis, who is also cochairman of the council. Mr. Santiago, meanwhile, said the industry would be validating its 8-12% in an upcoming meeting. Both Messrs. Santiago and Ortiz-Luis said that the slowdown in electronics came as "demand returned to normal levels." The United States was the top export destination for the month with revenues amounting to $602.2 million, up by 4.8% from a year earlier. Singapore was second with $573.6 million, up by 6.02%, followed by Japan which accounted for orders totalling $565.8 million. -- A. S. O. Alegado
The month’s net inflows totalled $441 million compared to the $172 million in December 2009, which the BSP said was due to "solid macroeconomic fundamentals and brighter growth potentials, together with the strengthening global economic recovery and improved risk appetite for emerging market assets." Equity capital net inflows rose to US$371 million from only US$2 million a year earlier, attributed to "sizeable foreign investments in the hotel, entertainment, and transport service industries". This offset a drop in net inflows of reinvested earnings and other capital of 50% and 60.3%, respectively, to $12 million and $58 million. The full-year FDI tally rose to a net inflow of $1.7 billion, down 12.7% from 2009’s $2 billion. "Equity capital investments in new and existing projects moderated during the year as investor sentiment was generally marked by cautiousness amid 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," the central bank said. The $848 million in net inflows of equity capital investments was down more than 50%. The central bank noted that in 2009, large-scale investments came in the form of the privatization of a local power corporation and the acquisition of shares in a local beverage manufacturing firm. Last year’s equity capital infusion came mainly from the United States, Japan, Hong Kong, Macau, Singapore, Ireland and Kuwait, the BSP said, benefiting the mining and quarrying, hotel services, real estate, transport and storage, banking, and manufacturing sectors. Reinvested earnings, meanwhile, rose by nearly 90% to $291 million last year as "foreign investors in local firms retained a larger amount of profits given the favorable domestic economic prospects." The other capital account -- intercompany borrowing/lending between foreign direct investors and their local subsidiaries/affiliates -- hit a net inflow of $574 million. This yas more than seven times the level last year and was due largely to higher intercompany loan availments, the central bank said. |
S&P 500 Drops to Lowest Level Since January Amid Concern Economy Will Slow U.S. stocks retreated, sending the Standard & Poor’s 500 Index to the lowest level since January, following an increase in jobless claims, a wider American trade deficit and a slowdown in China’s export growth. Caterpillar Inc. (CAT) and United Technologies Corp. (UTX) slumped at least 2.3 percent, pacing declines among industrial companies.Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) dropped more than 2.9 percent as crude oil declined a third day amid investor concern that fuel demand will slow. General Motors Co. (GM) decreased 2.6 percent after the largest U.S. automaker said Chief Financial Officer Chris Liddell will leave the company next month. The S&P 500 retreated 1.9 percent to 1,295.11 at 4 p.m. in New York. The Dow Jones Industrial Average decreased 228.48 points, or 1.9 percent, to 11,984.61 for the biggest decline since Aug. 11. The Stoxx Europe 600 Index tumbled 1.2 percent as Spain’s credit rating was downgraded by Moody’s Investors Service. Crude oil fell 1.6 percent to $102.70 a barrel. “There are so many uncertainties that it’s hard to want to bid up this market,” said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $340 billion. “On top of claims popping back up, there’s worsening in the trade deficit at a time when the emerging world is slowing down and the Middle East crisis creates an unpredictable environment for oil. To make matters worse, Spain gets downgraded, which is an indication that the European crisis may be far from being put to bed.”
Benchmark 10-year note yields dropped to the lowest since January as stocks tumbled, Moody’s Investors Service cut Spain’s credit rating, China’s export growth slowed, and reports indicated Saudi police fired on protesters. The Federal Reserve said it will buy $102 billion in debt over the next month under quantitative easing. “We got another strong result,” said Richard Bryant, head of Treasury trading in New York at MF Global Holdings Ltd., one of 20 primary dealers obligated to participate in U.S. auctions. “Across the board, there’s been very good demand for new supply this week. People are nervous.” The 30-year bond yield dropped 11 basis points, or 0.11 percentage point, to 4.50 percent at 5:21 p.m. in New York, according to BGCantor Market Data, the biggest intraday drop since Dec. 29. The price of the 4.75 percent security maturing in February 2041 increased 1 25/32, or $17.81 per $1,000 face amount, to 104 3/32. The benchmark 10-year note yield touched 3.36 percent, the lowest level since Jan. 31. The 2-year note yield decreased six basis points to 0.63 percent. The extra yield investors demand to hold 30-year bonds instead of 2-year notes was 3.87 percentage points, down from a record 4.02 percentage points reached Feb. 1 on a closing basis. |
Oil Pares Losses in N.Y., London as Saudi Security Forces Break Up Rally Oil pared losses after the police in Saudi Arabia, the Middle East’s biggest producer of crude, reportedly opened fire at a rally in the east of the country. New York futures rebounded from a four-month low and Brent crude oil, Europe’s benchmark, briefly rose after the news of the gunfire. Oil earlier fell as much as 3.6 percent after U.S. unemployment claims increased and Spain’s credit rating was cut, bolstering concern that the global economic recovery and fuel demand growth will slow. “We just got a taste of what will happen if there is any real turmoil in Saudi Arabia,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “This is what people have been worried about. Saudi Arabia is many times more important than Libya.” Crude oil for April delivery declined $1.68, or 1.6 percent, to settle at $102.70 a barrel on the New York Mercantile Exchange. Oil traded at about $101.50 before reports of the gunfire. Escalating violence in Libya, Africa’s third- biggest oil producer, pushed futures to $106.95 on March 7, the highest intraday price since Sept. 26, 2008. Brent crude oil for April settlement slipped 51 cents, or 0.4 percent, to $115.43 a barrel on the London-based ICE Futures Europe exchange. The contract dropped as much as $2.42, or 2.1 percent, earlier. The Associated Press reported that Saudi police opened fire, leaving at least one man injured, to disperse the protest in the mainly Shiite east. Saudi Arabian security forces broke up a rally in the city of al-Qatif, according to Ibrahim al-Mugaiteeb, a local activist. The action came a day before a “Day of Rage” advocated by anti-government demonstrators. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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