Philippines export growth to dip 2.9%

Despite the electronics segment's expected rebound.

According to DBS, February export numbers are due this week and hopes are rising for a turnaround in the electronics shipments. For February DBS is expecting headline YoY export growth of-2.9%.

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After languishing for seven months, the US semiconductor book-to-bill ratio broke above parity in the first two months of this year. Clearly, this is an encouraging sign and points return in electronics demand.

Electronics export values have plummeted from a peak of USD 3.5bn in September 2010 to a recentlow of USD 1.5bn in January. Over this time period, electronics exports as a percentage of total outbound shipments fell from 65% to 37%.

If not for the successful diversification into non-electronics manufactures, total outbound shipments would have been down sharply over the past 12months. For February we are expecting headline YoY export growth of-2.9%.

In sequential terms, this translates into a 7.2% MoM increase. Beyond the short term, however, it is still too early to say that a full-fledged electronics recovery is underway. Notably, a similar trend had also emerged in early 2012 before bookings tapered off sharply in July. Better traction in the global economic recovery will be needed for this improvement to be sustained.