MANILA (UPDATE) - A Philippine electronics industry group said on Tuesday it has cut its forecast for export growth this year to 5-7 percent from 10-15 percent due to slowing demand from the United States, China and Japan.
Electronic exports make up about half of the Philippines' total shipments, so any hefty reduction could affect overall economic growth.
But government officials are optimistic that any slowdown in exports would be offset by higher state spending on infrastructure projects - and the Semiconductors and Electronics Industries in the Philippines (SEIPI) still believes exports will rise this year.
In late 2011, electronic exports were weak, and SEIPI initially forecast 10-15 percent growth in 2012 as the group was "expecting a snap back by mid-year," its president Ernie Santiago said.
But so far, this year has been "anaemic" with slowing demand from the country's main trading partners, he said.
In the first four months, electronic exports increased fell nearly 2 percent from a year earlier. In April, there was a nearly 24 percent drop in shipments, the steepest fall since December. Santiago called it an "inventory correction."
He said he still expects a bounce in the second half, partly due to a low base from 2011 and stabilised inventory levels.
SEIPI encompasses more than 200 semiconductors and electronics manufacturers including units of Samsung Electronics and Texas Instruments.
The government has not yet adjusted its export growth forecast from the current 10 percent but last month it revised down its import growth estimate to 12 percent from 15 percent.
The Philippines, which imports electronic parts and inputs for assembly for export later, provides about 10 percent of the world's semiconductor manufacturing services, including for mobile phone chips and micro processors.
Imports in April dropped 13.7 percent from a year ago, the steepest fall in 2-1/2 years.
Manila is targeting growth of gross domestic product (GDP) to accelerate to 5 to 6 percent this year from last year's 3.9 percent. On Monday, President Benigno Aquino told Reuters the economy likely grew faster in the second quarter than the 6.4 percent annual rise posted in the first three months, the highest in six quarters.