Philippine merchandise exports will likely recover this year on the back of sustained electronics shipments, Singapore-based DBS said.
In a research note, the bank forecast 7 percent growth for 2016, noting that while exports growth remained negative at -1.1 percent in November last year, electronics chalked up a strong 9.3-percent gain.
Electronic products remained the country’s top export in November with a 54.2 percent share of the total, increasing to $2.54 billion. Semiconductors, in particular, grew by 5.7 percent to $1.96 billion.
“Export growth of electronic products is currently trending at circa 8 percent annual pace, pretty strong when compared to the performance elsewhere in the region,” DBS said.
While exports data may not matter as much when it comes to economic growth with domestic demand still the main driver, the bank said outbound shipments data should not be completely ignored as it could influence monetary policy.
DBS noted that the Bangko Sentral ng Pilipinas (BSP) turned more tolerant of a softer currency in the second half of 2015, just as export growth turned deeper in the negative.
“The outlook of export growth may have an impact on the central bank’s policy stance. At this juncture, we expect export growth to rebound to about 7 percent in 2016, pretty decent given the projected 6 percent fall last year,” it said.
“Accordingly, we reckon that there is a good chance that BSP may raise its key policy rate by 25 basis points in the second half of 2016,” it added.