To economists and analysts, the news that Philippine exports in March plunged 30.9 percent is good news. To them it means the Philippine economy is likely on its way to recovery.

Exports is one of the key hints of where the Philippine economy is headed. It accounts for about 40 percent of the local economy, which has not been spared from the impact of the global slowdown.

The March exports data indicates a "bottoming out," an economic lingo which simply means there's-no-way-but-up. The exports sector has been declining at a pace of almost 40 percent per month since November, that the 30.9 percent figure in March is considered a sign that the 'way up' is starting.

While labor is the country's biggest export--about one out of 10 Filipinos are working or living abroad--a good number of those who are left behind find employment in export-related industries, the biggest of which are multinational and local companies assembling imported electronic parts. The Philippines supplies about 10 percent of the world's semiconductor manufacturing services, including mobile phone chips and micro processors.

Shipments of electronics products 'recovered' in March since it only plunged by 33.9 percent after falling 45 percent in February. Wherever electronics go, total exports follow. Electronics accounted for 55.8 percent of total export receipts in March.

Leading computer-chip manufacturers have already cut thousands of jobs at their production facilities in the Philippines, adding to the 2.8 million Filipinos unemployed, or 7.7% of total workforce, as of January. In the export processing zones a few kilometers outside Metro Manila, at least 70,000 employees were laid off due to the closing of Philippine operations of companies like Intel, Panasonic, and Fujitsu.

Not so fast

Rebound in the March export data is "encouraging," described several economists interviewed by Reuters.

Simon Wong, economist at Standard Chartered Bank in Hongkong said, "I think the recent sign from the global economy is that we are entering a stabilisation phase where some of the major markets are showing signs of bottoming out," he added.

Explanations to this "bottoming out" range from the low inflation environment to the consumers benefitting from the stimulus packages of rich countries.

"We note that the leading indicator U.S. Semi ratio recovered slightly in March on month-on-month terms, fuelling expectations that the global stimulus disbursements and low inflation have in fact put purchasing power back into the pockets of the consumers," said Radhika Rao, economist at IDEAglobal in Singapore.

Singapore-based Forecast economist Vishnu Varathan added, "It should not be read for more than what it is -- a pick up after extended slump in external demand and a period of sharp inventory draw down."

While the global tide has not yet turned decisively, the Philippine economy is not yet about to roar back to health considering how exports is expected to behave throughout the year. The government expects export to post an average decline of 13 to 15 percent this year. Electronics is seen to fall 8 to 10 percent in 2009 after falling 8.31 percent in 2008.

"We may see exports growth to be at negative single digits towards the later part of the year, but for the full year it would still be a double-digit negative number," Wong pointed out.

"For next year, we may see a very slow recovery. We do not expect any strong rebound in exports, but the March data is pointing at the right direction," Wong concluded -- with Reuters, Lala Rimando of abs-cbnnews.com/Newsbreak