2013-10-09 14:41:11 - New Transportation market report from Business Monitor International: "Philippines Freight Transport Report Q4 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. www.fastmr.com/prod/689062_philippines_freight_transport_report_ ..
Full Report Details at
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.
Authority Launches Tender For CALA Expressway Project: Prequalification bids to finance, design, construct, operate, and maintain the four-lane Cavite-Laguna (CALA) Expressway project under a publicprivate partnership based model have been invited by the Philippine Department of Public Works and Highways, it was reported at the end of July 2013. The 47km closed-system tolled expressway project worth US$1bn, which would connect CAVITEX and SLEX, is expected to provide a more convenient and faster route from Metro Manila to the Calabarzon Region, which includes Cavite, Laguna, Batangas, Rizal, and Quezon. Interested bidders are required to submit their bids by September 23 2013.
Emirates To Introduce Second Philippine Service: A new second service is set to be introduced by UAE cargo airline Emirates SkyCargo to the Philippines, reported Transport Weekly at the end of June 2013. The company will launch a daily service from the UAE to Clark International Airport on October 1 2013. The airport is in the province of Pampanga, approximately 80km north of Manila. The service to Clark airport, which is situated in the Pampanga province in Central Luzon, will enable Emirates SkyCargo to provide an extra 160 tonnes of cargo hold capacity.
Key Risks To Outlook
Poor external conditions could begin to weigh on the Philippine growth story in the short term and headwinds are broadly based. Indeed, the state of the regional economy is highly reliant upon China, where an ongoing credit crunch is reflecting the mainland's pressing need for painful economic reforms. With the new Chinese government likely to, at least to some degree, embrace these reforms, we continue to believe that Chinese economic growth will cool substantially over not only the coming quarters, but the next few years as well, dragging on demand in a country that has consistently accounted for approximately 12% of total Philippine exports. Therefore, any slowdown would be detrimental to the Philippines freight industry.
In China, the HSBC manufacturing PMI is back in the red, export and import growth have collapsed, and the local equity market has given back its early 2013 gains. None of this should come as a major shock, however, the fact that economic momentum has stumbled despite a 51.7% y-o-y rise in total social financing (TSF, the broadest measure of net new credit) in the first five months of the year is as striking as it is ominous, in our view.
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com
or call us at 1.800.844.8156.