Philippine electronic exports to US and Japan
Date
2011-10
Authors
Ceralde, Marie Elaine A.
Eslava, Ana Isabel F.
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Abstract
This study examines the macroeconomic factors that affect the Philippines' electronic exports to its top two trading partners, the U.S. and Japan, over the last two decades. The ability of Philippine electronic exports to successfully tap these markets can be traced largely to the effects of certain factors, such as the real incomes of the U.S. and Japan and relevant exchange rates. Competition with Philippines' neighboring countries (Thailand, Indonesia and Malaysia) has also been considered. The study employs an econometric model that analyzes the response behavior or elasticity of each factor. Other factors such as the Asian and global financial crises are also considered in the analysis. The results with respect to real incomes in the U.S. and Japan appear to correspond with the increase in demand for the electronic exports from the Philippines. The exchange rate elasticities of the electronic exports suggest that a devaluation of the Philippine peso is effective in increasing the U.S. demand for such exports. In contrast, a negative effect shows up as regards the demand of Japan for the country's electronic exports. The exchange rates of the U.S. and Jap~ currencies with respect only to Thailand among the competing countries appear to be a significant factor in influencing the electronic exports. The Asian and the global financial crises have also contributed to a decline in demand for the country's electronic exports, albeit not significantly.
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Keywords
Macroeconomics, Philippine electronic exports, United States of America, Japan