Exports surge to boost PH growth

MANILA, Philippines–The surge in the country’s exports in November reported by the government last week should help improve income levels in the coming months, helping keep overall growth rates “above trend.”

American financial giant JP Morgan Chase & Co., in a new note to investors, said stronger exports would complement more aggressive construction spending this year as a result of the rollout of big ticket infrastructure projects.

“With exports rising even in the face of ostensibly modest external activity, income effects should help boost fixed investment outside of construction,” JP Morgan said at the weekend.

Government data released last week showed January to November 2014 exports figure also already exceeded the total value of outbound shipments for the entire 2013.

Preliminary Philippine Statistics Authority data showed that the value of exports in November last year jumped 19.7 percent to $5.18 billion from $4.32 billion recorded during the same month in 2013.

The export revenues last November were also higher than October’s $5.17 billion.

The year-on-year increase posted in November was the fastest since July, although slower than the 21.3-percent growth recorded last June—the highest thus far in 2014.

Growth in Philippine exports was fastest in the region, beating Vietnam (10.8 percent), China (4.7 percent), Taiwan (3.7 percent), Hong Kong (2.8 percent), Thailand (-1.0 percent), South Korea (-2.1 percent), Malaysia (-2.3 percent), Singapore (-6.4 percent), Japan (-10.0 percent) and Indonesia (-14.6 percent).

“Together with a more aggressive public-private sector spending plan, growth is expected to remain above trend,” JP Morgan said.

The bank sees the Philippine economy growing by 6 percent this year, which is lower than the state’s target of at least 7 percent. In 2014, the government’s goal of seeing the economy grow by at least 6.5 percent was also likely to be missed, given that, as of the end of the third quarter, the country’s gross domestic product had expanded by only 5.8 percent.

“One risk to this otherwise positive 2015 forecast is the impact of port-related bottlenecks on imports, which during the second quarter of 2014, appears to have affected capital goods imports and thus fixed investment,” the bank said.

JP Morgan noted that the effects of port congestion “seem to be easing of late.”