Boston, MA -- (ReleaseWire) -- 04/29/2013 -- BMI View
The Philippine economy managed to successfully traverse the global economic headwinds in 2012, experiencing a solidly above-consensus year in 2012, expanding by at least 6.0% even as the rest of the region slowed. BMI believes that the economy of the Philippines will continue to be an outperformer in the region on the back of strong investment activity and a resilient consumer. The Philippine economy continues to outperform both consensus expectations and its regional peers, with the latest data showing a blistering 7.1% year-on-year (y-o-y) expansion in Q312. Indeed, on the back of a surging construction sector as well as the robust Philippine consumer, we estimate that the economy grew by at least 6.0% in 2012. That said, we believe it will be difficult for the Philippines to maintain its impressive rate of export growth in 2013 as a strong peso begins to weigh on outbound shipments. Nevertheless, we do see some signs of light in the beleaguered electronics export segment, which makes up approximately 43.3% of total exports. Electronics exports expanded by 13.3% y-o-y in November, the strongest growth rate since February 2012 and enough to bring the 3-month moving average (3mma) to 4.9%, its fastest clip since March. In line with our expectations for China's economy to experience a transitory growth pickup in H113, the Philippines may be well-poised for a parallel uptick in electronics exports given its role in the region's semiconductor value chain.
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A reprieve for the country's poorly performing electronics exports would provide a huge boost for overall exports, and therefore, the shipping sector, which in 2012 relied on surprisingly high demand for the country's miscellaneous manufactures. However, such a strong performance in manufacturing is unlikely to be repeated in 2013, and exports are likely to return to dependence on the electronics sector.
By port, the country's outperformer in terms of tonnage throughput in 2013 is set to be the Manila International Container Terminal (MICT), which will edge ever so slightly ahead of the Port of Cebu with year-on-year (y-o-y) growth of 4.98% at the former compared to 4.90% at the latter. In box terms, Cebu may not be able to outdo MICT in twenty-foot equivalent units (TEUs) handled, but will enjoy more impressive y-o-y gains in 2013 (6.69% compared to 6.00%).
Over the medium term to 2017, MICT will enjoy the strongest average annual growth in tonnage terms, averaging above 5% over this period, while in the container sphere, box throughput will see the highest y-oy growth at the Port of Cebu.
Headline Industry Data
- 2013 tonnage throughput at MICT forecast to grow 4.98% to 20.33mn tonnes.
- 2013 tonnage throughput at the Port of Cebu forecast to increase 4.90% to 28.13mn tonnes.
- 2013 tonnage throughput at the Port of Davao forecast to rise by 2.50% to 11.48mn tonnes.
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