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"Philippines Freight Transport Report Q4 2013" Published

New Transportation market report from Business Monitor International: "Philippines Freight Transport Report Q4 2013"


Boston, MA -- (SBWIRE) -- 10/24/2013 -- Despite a considerable slowdown in exports, the Philippine economy continues to power on, with Q113 figures reflecting impressive real GDP growth of 7.8% year-on-year (y-o-y). That said, the export picture will be a concern to those operating in the freight sphere in the Philippines, following earlier downward trends occurring in January 2013, when Philippine exports decreased by 2.7% year-on-year (y-o-y), breaking the four month-long trend of expansion that had been in play since September 2012. Electronics exports in particular, which had been showing signs of a nascent recovery over the past few months and are so important to the Philippine freight industry, disappointed consensus estimates for 6.0% growth, with a 31.9% decline posted in January 2013.

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Although we reiterate that the Philippines is indeed vulnerable should external conditions continue to worsen and that medium-term risks stemming from a potential Japanese fiscal crisis are pertinent, we believe that strong domestic fundamentals will be enough to power the country on to strong growth over the immediate future. As such, we note that that risks to our 2013 real GDP growth forecast of 5.9% are to the upside and have upgraded our 2014 and 2015 forecasts to 5.5% and 5.4%, respectively.

Additionally, China's growth bounce has proven superficial and signs of an incipient slowdown in economic activity are already under way. This will have a detrimental effect on the Philippines freight industry over the short term, with China coming in third in terms of the Philippines' export partners.

In terms of the freight mix, the shipping sector is set for the healthiest annual growth, with the Port of MICT predicted to see healthy gains of more than 5% in 2013. The air freight sector too is set to perform relatively well this year, with growth in annual tonnage forecast to come in at over 4%.

Headline Industry Data

- 2013 air freight tonnage forecast to grow 4.34% to 715,000 tonnes.
- 2013 Port of Cebu tonnage throughput forecast to rise by 4.90% to 28.13mn tonnes.
- 2013 Port of MICT tonnage throughput forecast to increase 5.30% to 21.03mn tonnes.
- 2013 total trade forecast to grow 2.50%, with exports growing 2.00% compared with import growth of 3.00%.

Key Industry Trends

PIL To Initiate Direct Service From June 20: Pacific International Lines (PIL) of Singapore is set to launch a direct service between Manila, Philippines, and Long Beach, US, on its existing China Transpacific service. The maiden voyage with a 1,300 twenty-foot equivalent unit (TEU) boxship, Kota Wangi, is due to begin on June 20 from Manila (North Habour) and is destined to reach Long Beach on July 12 2013.

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