Philippine exports growth slumps to just 5.5%

Blame it on agro-based products.

According to Nomura, export growth disappointed in November, slowing to 5.5% y-o-y from 6.1% in October. This was well below consensus expectations of 20.1% (Nomura: 14.4%). The main drag was agro-based products, which fell 52% after rising 6.2% in the previous month.

By contrast, electronics exports rose 13.3% after rising just 0.3% in October. By destination, exports to the US and China weakened further.

Here's more from Nomura:

We expect more weakness in year-on-year headline export growth, at least in the next two to three months. The strong typhoon last December likely hit agriculture output further, while in electronics the base effects will turn much more unfavourable.

The risk is that this translates to more fears that currency strength – on an REER basis, PHP is up nearly 10% in 2012 – is already eroding external competitiveness and hence giving exporters more ammunition to lobby Bangko Sentral (BSP).

That said, BSP Deputy Governor Guinigundo, following the data release, attributed export performance to "weak global markets" and added "I don't think a rate cut will help."

Indeed, in terms of the impact on GDP, we expect it to be limited given that domestic demand will remain a strong contributor to growth, particularly public and private investment spending. We maintain our 2012 and 2013 GDP growth forecasts of 6.6% and 6.4%, respectively.