MANILA, Philippines - Merchandise exports growth may start decelerating in the last quarter of the year, Singapore-based investment bank DBS said, citing the slowdown in imports which are largely inputs to outbound shipments of the country.
“Expect to see some moderation in export growth in the fourth quarter. Total 2014 export growth may now come in lower than our earlier estimate of nine percent,” DBS said in a research note.
“Yet, even at the current pace, net exports are likely to contribute about one-third of overall GDP (gross domestic product) growth this year, which we still estimate to be circa 6.4 percent,” the bank added.
Exports increased 15.7 percent to $5.849 billion in September from $5.056 billion in the same month last year, latest government data showed.
DBS noted that the growth rate was above expectations and this brought the third-quarter expansion at 12.9 percent over year-ago levels.
The Philippine Statistics Authority last week said merchandise exports growth was driven by strong demand for electronic products, which rose 13.6 percent to $2.442 billion in September.
Other major commodities which helped increase merchandise exports in September were chemicals, machinery and transport equipment, other mineral products, coconut oil, and other manufactures.
“Signs from imports data, however, provide reasons to be more cautious going forward,” DBS said.
Merchandise imports contracted 1.3 percent to $5.491 billion in August from $5.563 billion a year ago on lower orders of electronic products, and mineral fuels, lubricants and related materials.
“A weaker peso might have put some pressure on import demand. More importantly, a slower pace of fiscal spending and still the sluggish state of global economy could have weighed on sentiment among producers,” DBS said.
“The upcoming imports data for September and October will provide stronger cues,” the bank added.