Boston, MA -- (ReleaseWire) -- 04/14/2014 -- Despite the devastating result of Typhoon Yolanda on the Visayas (the impact of which was felt by the country's freight industry), the Philippines does have a lot going for it over the medium term. Political stability and prudent monetary and fiscal policies are all combining to inform BMI's optimistic outlook. Therefore, we have upgraded our 2014 real GDP growth forecast to 6.3% (from 6.0% previously), and also see scope for the economy's long-term trend growth rate to increase as long as the aforementioned factors remain in play.
The Philippine economy expanded by 7.0% year-on-year (y-o-y) in Q3 2013, bringing real GDP growth through the first three quarters of the year to 7.4% versus the same period in 2012. This is a far higher growth level than that seen in the shipping sector in the Philippines, with the country's top port by tonnage throughput, the Port of Cebu, pencilled in for growth of just over 3% in 2014. Elsewhere in the freight mix, air freight will enjoy slower growth than GDP but at a still healthy 5.59%.
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Although the country's freight industry will not grow at quite the same rate as GDP in 2014, both air and maritime freight are set to enjoy a healthy 12 months, with the former mode set to expand at the highest rate per annum. In the maritime sector, the Port of MICT is pencilled in to see higher y-o-y growth in 2014 than its regional peer the Port of Cebu (4.89% compared with 3.30% respectively).
Headline Industry Data
- 2014 air freight tonnage forecast to grow 5.59% to 755,000 tonnes.
- 2014 Port of Cebu tonnage throughput forecast to rise by 3.30% to 29.05mn tonnes.
- 2014 Port of MICT tonnage throughput forecast to increase 4.89% to 22.05mn tonnes.
- 2014 total trade forecast to grow 5.30%, with exports growing 5.10% compared with import growth of 5.50%.
Key Industry Trends
PAL Relaunches Saudi Arabia Service: Philippines Airlines (PAL) resumed its Manila-Riyadh and Manila-Dammam service, the Philippine Embassy said in a press statement at the end of December 2013, according to Arab News. PAL first launched flights to and from Saudi Arabia in 1982 and it is hoped that, as well as buoying Saudi interest in the Philippines in terms of tourism, the move may also provide a boost to freight operations.
DOTC Invites Bids For PHP2.5bn Southwest Terminal Project: The Department of Transportation and Communications (DOTC) invited companies to bid for the Integrated Transport System Project-Southwest Terminal in the Philippines, it was announced at the end of December 27 2013. A single-stage bidding process will be adopted for the project, where interested groups will be required to submit prequalification documents together with technical and financial proposals on or before May 15 2014. The bid documents, which will cost PHP150,000 (US$3,372.73), will be available on January 10 2014.
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