US recovery, Asean linkage to boost exports

MANILA, Philippines - Philippine exports growth should remain strong this year on the back of an improving US economy and better prospects with the integration of the Association of Southeast Asian Nations (Asean), the research arm of Metropolitan Bank and Trust Co. said.

“Despite the gloomy global macroeconomic backdrop, the outlook is for global trade to improve this year amid the strengthening US economy and falling oil prices,” Pauline Revillas, research analyst at Metrobank, said in a research note.

“Furthermore, the sustained growth in the Asean region is seen to support global trade,” she added.

The International Monetary Fund in its World Economic Outlook released last month cut global output projection to 3.5 percent this year  due to limited prospects in China, Russia, the euro zone and Japan.

The US economy, however, is forecast to expand 3.6 percent this year, 0.5 percentage point faster than the IMF’s earlier projection. But the IMF reduced its estimate for the Asean-5 bloc’s growth forecast by 0.2 percentage point to 5.2 percent this year as Indonesia, Malaysia, the Philippines, Thailand and Vietnam are seen taking a hit from the slowing Chinese economy.

“The recovery of world trade in 2014 was seen as modest, coming from a lackluster performance in 2013,” Revillas said.

“Despite the upturn in the US economy, the weakness in the eurozone continued to be a drag to global trade,” she added.

The Philippines saw its outbound shipments increase nine percent to $61.81 billion last year from $56.698 billion in 2013. Electronic exports, which made up more than 40 percent of shipments last year, went up 8.1 percent to $25.876 billion.