British banking giant HSBC sees the Philippines’ external trade growing faster than the global trade expansion in the next five years, supported by rising intra-regional trade, entry into new markets and expansion in the volume of higher value-added products.
In a briefing on Wednesday, HSBC senior vice president and head of global banking Junie Veloso said Philippine trade would likely grow by an average of 6.4 percent over the next five years, faster than the projected growth of 3.78 percent in global trade.
Veloso said exports and imports performance would depend on the price of oil (considering that the Philippines is an oil importer), but these economic indicators would likely track the projected overall trade growth outlook.
Citing the forecasts of HSBC Global Connections, Veloso said that as supply chain shifted toward exporting computers and integrated circuits and veered away from semiconductors and diodes, total trade would likely grow by an average of 15.82 percent by 2016 and 55.54 percent by 2026.
“This trend is not surprising for two reasons—first because of the country’s strong efforts to expand its trade corridors and build a greater international presence and, second, because of the close trade connections it has with the rest of Asia-Pacific,” Veloso said.
Veloso said HSBC had not factored in the potential impact of mining on the Philippines. “So that’s an upside if we are able to agree on a strategy on mining on a national level that can make us a big player in that particular sector,” he said.
The Philippines is the fifth-most mineralized country in the world but has yet to unlock great values out of mining, which is facing stiff opposition from environmentalists.
Based on HSBC research, global trade will accelerate from 2014 and trade growth in Asia-Pacific will consistently outperform the global average. The forecast also expects China to overtake the US as the world’s largest trading nation by 2016.
Demand from Asia-Pacific is seen driving global trade acceleration in 2014. Over the next five years, trade growth in China (6.61 percent) and Asia (6.5 percent) is seen substantially outpacing global pace.
“Our research provides clear optimism for the region’s trade prospects in a somewhat challenging environment. Over the next 15 years, trade in Asia and globally is expected to grow 120 percent and 86 percent, respectively,” Veloso said.
“The world’s largest businesses are continuing to broaden their supply chain across Asia-Pacific, increasingly integrating into the manufacturing process and, therefore, trade.