Philippine exports hit a record high in September, buoyed by the global artificial intelligence (AI) boom, which fueled demand for locally made electronics.
But the semiconductor-led surge underscored the need to diversify the country’s export base to protect the gains should the technology-driven demand suddenly falter.
Latest data from the Philippine Statistics Authority showed export receipts rose 35.6 percent from a year earlier to $9.9 billion, the highest on record.
Semiconductor exports, the country’s biggest export category, soared 86.1 percent to $5.7 billion, bucking the weakness in other sectors, including mineral products, machinery, gold and other manufactured goods.
Demand from the United States, the Philippines’ largest export market and a major center of AI-related investment, grew 135.3 percent to $2.6 billion in September.
In a commentary, economists at China Banking Corp. said the Philippines should power up other sectors where export performance remained weak, warning that the electronics-led growth is vulnerable to sudden reversal in global AI demand.
The bank noted that energy, water and environmental concerns were already posing a risk to data center expansion.
‘AI-related investment continues to underpin chip demand, but the cycle could eventually moderate as capacity expands, investment returns come under greater scrutiny, or technology spending slows,’ Chinabank said.
‘Although the timing of a potential downturn is difficult to predict, the Philippines’ reliance on semiconductor exports leaves it vulnerable to shifts in global technology investment,’ it added.
Trade deficit still widened
Despite the record export performance, the country’s trade deficit widened 10.3 percent in September to $5.2 billion, a two-month high, Philippine Statistics Authority data showed.
This, after imports surged 25.7 percent to $15 billion, also setting a record.
Purchases of key food commodities remained elevated amid the ongoing El Niño episode, with rice imports rising 26.4 percent and dairy purchases climbing 20.2 percent.