Philippines' March exports feared to contract 7.5%

How will overall export growth be affected?

According to DBS, March export numbers are due tomorrow and the data will be closely watched for any rebound in the electronics sector. 

Overall outbound shipments have been subpar of late and exports fell by 6.7% MoM (a drop of 15.6% YoY) in February.

Here's more from DBS:

The rebound in electronics demand did not materialize and electronic exports were down by an average of 34% YoY in the first two months of the year.

To be sure, several indicators point to a turnaround in electronics demand. These include an increase in new orders for US computers and electronics (in March), a third consecutive month where the US semiconductor book-to-bill ratio stayed above 1 (ending March), a sharp rebound in Taiwan’s electronics new export orders (in March) and a third consecutive month (ending April) where Singapore’s electronics PMI signaled expansion.

The more pertinent question lies with whether the electronics industry in the country is facing structural issues, especially considering Filipino electronics export performance compared to peers in the region.

We expect exports to post a contraction of 7.5% YoY in March. Assuming a moderate recovery takes place in the coming months, overall export growth for 2013 is likely to be in the low-to-mid single digits.