MANILA -- Philippine exports are expected to grow 10 percent this year although the country needed to diversify its product offerings, Economic Planning Secretary Augusto Santos said yesterday.

Exports grew only 3.9 percent last year to $41.22 billion, well below the 8.0 percent growth target, the National Statistics Office said earlier.

However, exports in December showed signs of a recovery, rising 16.8 percent over the same period in 2004 to hit 3.83 billion dollars, the agency said.

Sales of electronic products, which account for more than 60 percent of total shipments, grew only 2.2 percent in 2005 to hit $27.3 billion but in December were up 15.7 percent to $2.59 billion.

Economic Planning Secretary Santos however said the government was maintaining its 10 percent growth target for exports this year although he conceded it would require market and product diversification and a strengthening of exporter competitiveness.

"This will entail addressing infrastructure bottlenecks, improving labor productivity and promoting competitive power rates," he said in a statement.

Higher costs of oil, raw materials and electricity may also result in higher production costs, hampering the competitiveness of Philippine products, Santos said.

The United States was the biggest buyer of Philippine products in 2005, taking $7.4 billion, a 4.4-percent increase over 2004, the NSO said.*AFP

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