WB sees rise in Phl exports of manufactured goods

MANILA, Philippines - Philippine manufactured goods and services will be among the regional exports which are expected to achieve accelerated growth, as global trade flows regain strength resulting from the recovery in import demand from high-income countries.

The World Bank (WB) said such recovery should boost global trade flows that are projected to recover from their current low levels of 3.1 percent to 5.1 percent by 2016.

“Increased trade will benefit exporters of manufacturing products and services (China, Malaysia, Pacific Islands, the Philippines, Thailand), and economies with relatively low unit labor costs and competitiveness exchange rates (Cambodia, Lao PDR, Myanmar, Vietnam),” said the WB in its latest Global Economic Prospects.

The bank stressed that stronger high-income growth and import demand will be an important tailwind for developing countries’ exports, in addition to boosting global growth.

Global gross domestic product (GDP) is expected to gradually rise to 3.5 percent in 2016 from last year’s 2.4 percent.

On the other hand, growth of high-income countries, which include the United States, eurozone and Japan, is projected to strengthen from 1.3 percent in 2013 to 2.4 percent in 2015 and 2016.

“This should help compensate for the inevitable tightening of global financial conditions that will arise as monetary policy in high-income economies is normalized,” it said.

The WB also pointed out that the strengthening high-income demand and a policy-induced rebound in China have been bolstering activity and sentiment in developing countries since mid-2013.

It said these positive developments were, however, partly offset by tighter financial conditions and reduced capital flows as long-term interest rates in the US ticked up in response to expectations of the gradual withdrawal of its stimulus program.

“Other major headwinds included declining commodity prices for commodity exporters,” the bank said.

Overall, growth in developing countries is expected to pick up modestly to 5.7 percent in 2016 from 4.8 percent in 2013.

“Growth accelerations are projected to be particularly muted in East Asia and the Pacific and Latin America and the Caribbean, as economies in both these regions have already recovered from the crisis and are growing at close to potential,” the bank said.