UPDATE 1-Philippine exports fall deepened in April

*Annual fall in April exports steeper than in March

*April mth/mth exports down 3.6 pct vs 16 pct growth in March

*Intel's closure in Philippines hurting exports (Recasts, adds comments, background)

By Manolo Serapio Jr. and Karen Lema

MANILA, June 10 (Reuters) - Philippine exports slumped more than a third in April from a year earlier, steeper than the drop in March, with demand from top trading partners like the United States for key electronics products still sluggish.

Intel's (INTC.O) downscaled Philippine business has also dampened electronics exports, the head of an industry group said. Intel was once one of the country's top 10 exporters before it announced this year its closure in late 2009 at the earliest.

The Philippines is not alone in Asia to post dismal April exports and analysts said more volatility was likely in May and June because of a high base in the first half last year. "Exports are coming in softer than expected with manufactures showing little improvement, suggesting that external sector risks have not abated as much or as quickly as was being hoped for," said Vishnu Varathan, an economist at Forecast in Singapore.

Exports dropped 35.2 percent in April from a year earlier, deeper than a 30.8 percent fall in the previous month, the government's statistics office said on Wednesday.

Month-on-month exports in April fell 3.6 percent to reverse a 16 percent growth in March.

Shipments of electronics products, which made up around two-thirds of the country's total exports, plunged 33.2 percent in April from a year earlier, little changed from an annual 33.8 percent fall in March. The April year-on-year drop was the smallest drop since November.

ELECTRONICS WEAK

Electronics shipments were up 3.9 percent in April from the previous month, sharply lower than the 19.9 percent rise in March. The data surprised the electronics industry which had expected exports to have bottomed out in the first quarter.

"Everything we are seeing is the other way," Arthur Young, chairman of the semiconductor and electronics industry group, told Reuters, regarding the trend in electronics exports.

"Intel is not producing anymore (from the Philippines), this is probably one of the reasons why," Young said, adding the May and June data should show better results.

Imports, for which April figures are due to be announced on June 25, fell at a record pace of 36.2 percent in March due to weak demand for electronics parts largely used in export products. Analysts have said that may deflate some of the optimism that demand may be picking up. [ID:nSP195577]

But Young said there were signs of an aggressive rebuilding of inventory for netbooks, flat screen TVs, networking infrastructure, and phones mainly in China and India.

The latest data showed exports to China, the country's third largest market with an 11 percent share, plunged an annual 41 percent in April, easing from a near 44 percent drop in March.

But shipments to top market the United States, accounting for 16 percent of total exports, dropped an annual 35.3 percent in April, steeper than a 26.5 percent fall in March.

The government expects exports to fall 13-15 percent this year after a 2.86 percent drop in 2008 as the global downturn hit demand from key markets like the United States. (Writing by Rosemarie Francisco; Editing by Jan Dahinten)