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A man (R) pushes a child (C) that sits on a suitcase as they wear protective masks to help stop the spread of a deadly virus which began in Wuhan peaks through a plastic curtain at the Beijing railway station in Beijing on January 27, 2020.
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Looming China slowdown presents 'even more trying scenario' for Philippine exports — ING
Ian Nicolas Cigaral ( - February 12, 2020 - 12:21pm

MANILA, Philippines — Turbulence may be ahead for Philippine exports this year despite posting a surprise double-digit growth last December, as a looming slowdown in China, one of the Southeast Asian country’s major trading partners, will likely disrupt global trade.

Exports unexpectedly surged 21.4% year-on-year in December while imports sagged by 7.6%, helping narrow the Philippines’ trade gap in the final month of 2019 to $2.48 billion, 40.6% smaller than the $4.17 billion deficit registered a year ago.

However, lower demand from China as the corona virus disease 19 outbreak weakens domestic economic activity in the mainland could weigh on Philippine exports and economy this year, ING Bank senior economist Nicholas Mapa said.

On the other hand, imports could rebound this year as the government begins infrastructure projects, Mapa also said, adding that the Philippine peso could depreciate this year.

“The new year presents a different and possibly even more trying scenario given the imminent economic slowdown of China, one of the top export destinations and a major source of imports,” Mapa said.

“Given China's prominence in the global supply chain, we can expect external trade to hit a snag with global growth expected to decelerate in the coming months,” he added.

“The likely weakness in demand for Philippine exports will be reflected in lackluster manufacturing activity in the Philippines which should dent economic growth momentum in the Philippines further,” he continued.

Beijing had already been battling a slowing domestic economy before the new coronavirus emerged, disrupting businesses, travel and supply chains.

With analysts warning that the virus could cut into the country's already slowing economy, China's central bank has urged financial institutions to continue stepping up support for small and micro enterprises.

As businesses and factories in the mainland close due to internal travel restrictions to contain the SARS-like virus, a 20% drop in imports from China in three months could slash Philippine economic growth by 0.08%, ANZ Research said last month.

In December last year, China was the third top destination of Philippine exports with value of $835.15 million. — with a report from AFP

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