Philippines export momentum likely to be soft in near-term on non-electronics drag

Philippines exports in October were epected to to drop by 3.3% from that of the previous month by the market consensus, but they came in weaker than anticipated, falling by 10.8% yoy

The contraction in exports eased from the 15.5% yoy fall in September. This development was mainly led by electronics exports, which expanded by 7.2% yoy. A relatively low base also helped in October.

The soft exports and weak pace are in line with the latest deterioration in US ISM new orders, which dropped to lowest level since 2012, signaling the sluggish external demand.

"In the absence of a meaningful pickup in external demand, exports are likely to remain subdued. Growth momentum has been holding up well, but it is likely to moderate in the coming quarters given poor weather and weak consumption. As such, we maintain our 2015-16 growth forecasts at 5.5%", says Barclays in a research note.