EXPORTS WILL LIKELY contract far more than initially expected this year given a gloomier outlook for electronics, officials said, but a double-digit bounce may come as early as 2010.

The current forecast of a 7% contraction will have to be revised given the electronics industry’s expectation of a steeper 20-30% plunge for 2009, the Export Development Council (EDC) said.

"A decline of more than 7% is possible. It’s expected," EDC Executive Director Senen M. Perlada said in an interview.

"I don’t think the growth in other industries will be enough [to offset the deeper decline in electronics]."

The -7% forecast, made in February and already a revision of a -3% outlook issued at the start of the year, takes into account a -10% growth in electronics shipments. Merchandise exports slumped by 2.86% to P49.023 billion, the first time since 2001.

Last week, the Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) said it was now looking at a 20-30% contraction after January sales halved from a year earlier.

Both the SEIPI and EDC forecasts remain preliminary. The latter, in fact, is scheduled to meet with industry groups later this month to update the outlook for the year.

"We will review all of these targets at the end of the quarter. We will consolidate that (the new electronics projection) with how other industries are doing," Mr. Perlada said.

But for next year, electronics sales may turn around to achieve 10% growth, propelling overall exports to a 13% rise, he claimed. Commenting on the outlook, SEIPI chairman Arthur J. Young, Jr. said the figure "could be achievable coming from a weak 2009."

The EDC also expects flat 2009 growth for the furniture and car parts industries, followed by 10% and 2% growth, respectively, next year. Garment sales, meanwhile, are expected to plunge by 25% this year before improving to a 3% growth in 2010.

Car part manufacturers were not as optimistic.

"I doubt that projection. This year, I don’t think it will be flat. [And for 2010], it remains to be seen," Motor Vehicle Manufacturers Association of the Philippines Vice-President Ferdinand I. Raquelsantos said in a telephone interview.

Mr. Perlada said combined sales of exported goods and services would dip by a tamer 2% this year as revenues from business process outsourcing and tourism could grow by a fifth.

Aggregate merchandise and services exports totalled P62.458 billion last year.