PHL 2013 growth could exceed 7% – Singapore's DBS

The recent rebound in Philippine imports suggests higher exports that could bolster Manila's economy to grow by over 7 percent this year, Singapore-based DBS Bank Ltd. said Friday.

In its latest Daily Breakfast Spread, DBS Bank — Southeast Asia's largest lender — sees the improving Philippine imports feeding domestic demand and resulting in a recovery in exports receipts.

“Not only does this point to continued strength in domestic demand remains but could be signaling further preparations by export manufacturers,” the report read, referring to the 8.7 percent annual growth in imports in July.

The latest imports data came well above market consensus of a 0.4 percent contraction.

“This suggests that local firms are gearing up for a bounce in export demand towards the year-end, as conditions in the global economy continue to improve,” the report read.

Thus, DBS projects “exports chalking double-digit growth starting in August onward.”

After being a drag to growth in the first half, exports is now seen by DBS fueling the economy in the second half.

“Coupled with the still solid picture in the domestic economy, growth may even surpass our current 7 percent forecast for 2013,” the report read.

The July imports growth is the second expansion posted for the year, and is the fastest since December 2012.

The uptick was due to a 33.1 percent year-on-year growth in imports of electronics, the Philippines' top export product.

The view is shared by Philippine economic officials, who see the electronic arrivals as boosting outbound shipments in the coming months.

“This reflects the broadly upbeat prospects for the country’s export-oriented electronics industry for the remaining months of 2013,” Rolando Tungpalan, Deputy Director-General at the National Economic and Development Authority, noted in an e-mailed statement to reporters Wednesday.

The government expects imports to grow by 12 percent and exports by 10 percent this year. It also targets a 6 to 7 percent economic expansion this year from 6.8 percent in 2012.

Buoyed by a resilient services sector as well as robust manufacturing and construction activities, the Philippine economy grew at the fastest rate in Southeast Asia of 7.5 percent in the second quarter. — KBK, GMA News