BMI View: Overall, 201 6 will be a year of mixed growth across the Philippine freight transport industry, with air freight set for a robust expansion, while road haulage will be more sedate. External headwinds will weigh on exports, but strong domestic demand and investment should support continued volume growth.
The outlook for the Philippines' trade remains mixed, in large part due to a sedate regional environment which is impacting upon demand from the country's major neighbouring trade partners. Deteriorating regional demand conditions will weigh on export performance in the Philippines, acting as a drag on the Philippine economy and adding downside pressure on the peso. Mounting concerns over the Chinese economy following the People's Bank of China (PBOC)'s cumulative 3.5% devaluation of the yuan in August could also undermine regional growth prospects, potentially contributing to rising fears of default risks in the region. Despite this, we expect that the economy as a whole will remain resilient thanks to a likely uptick in fiscal spending, which should in turn support imports. We forecast real GDP growth of 6.0% in 2016 and 5.9% in 2015, from an estimated 5.7% in 2015.
According to our forecasts, growth in road haulage volumes in the Philippines will be fairly lacklustre, at just 2.1% in 2016 and 2017. If borne out, this would see 524.14mn tonnes transported by road haulage this year. This is in part due to the poor outlook for exports in the Philippines, as sluggish growth in major regional trade partners China and Japan will weigh on performance. However, there will be support from the domestic consumer market, as private consumption growth should remain resilient on the back of continued strong remittance inflows.
We expect robust growth in the Philippines' rail freight sector in 2016 and 2017, projecting an expansion of 6.8% and 7.3% respectively; only growth in air freight volumes will outpace it. The growth will be driven by ongoing investment into the as yet fairly underdeveloped network, and by an expected construction boom over the next several years.
Growth in air freight will be supported by healthy economic growth in the Philippines over the next several years. The poor outlook for exports - owing to depressed demand from major regional trade partners China and Japan - could weigh on volume growth, but we expect that this will be offset by resilient domestic demand, which will drive demand for imported consumer and capital goods transported by air freight.
Key BMI Forecasts
We forecast total road freight volumes will rise by 2.1% in 2016 to reach 524.14mn tonnes.
We forecast total rail freight volumes will rise by 6.8% in 2016 to reach 6.38mn tonnes.
We forecast total air freight volumes will rise by 8.0% in 2016 to reach 1.09mn tonnes.
We forecast total trade value to rise 6.3% in nominal terms, to reach USD195.2bn in 2016.
The top trade partners will be Japan, the USA, mainland China, Hong Kong and Singapore.
The Philippines Freight Transport Report has been researched at source, and features latest-available data covering commercial transport and logistics by road, rail, air and water; industry forecasts, company rankings covering leading national and multinational operators; and analysis of latest industry trends, opportunities, projects and regulatory changes.
BMI Research's Philippines Freight Transport Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Philippine freight transport and logistics industry.
- Benchmark BMI's independent freight transport industry forecasts on Philippines to test other views - a key input for successful budgetary and planning in the strategic freight transport market.
- Target business opportunities and risks in the Philippine freight transport sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Philippines.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs, and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering freight transport and logistics, regulatory changes, major investments and projects and significant national and multinational company developments.
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the freight transport sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2008-2012) and forecasts to end-2019 for all key industry and economic indicators (see list below), supported by explicit assumptions plus analysis of key downside risks to the main forecast including:
- Transport Sector: Total freight carried by road, rail, inland waterways, maritime, air and pipeline (mn tonnes-km/mn tonnes).
- Trade: Exports and imports (USDmn) by category of goods (manufactured goods, food, chemicals etc.); top five import and export trade partners (USDmn); imports/exports to each global region (USDmn)
- Port Data: Throughput (‘000 tonnes) for all major ports in the state.
- Oil Products Prices: Price forecasts for gasoline and aviation fuel (USD/bbl) at all major global energy trading hubs.
- Economic Indicators: Nominal GDP (USDbn); real GDP growth (%); GDP per capita (USD); industrial production (%); unemployment (%)
Details of the freight infrastructure in each state by segment (road, rail, air, water and pipelines). Full analysis of the competitive landscape within each segment.
Industry Trends and Developments
Analysis of the latest projects across the freight transport sector (road, rail, air, sea and logistics) including a market overview which provides an outline of the key elements driving development.
The Freight Transport market reports contain a chapter detailing the political outlook of a given region, examining the domestic politics, long-term outlook and foreign policy, and assessing the impact this could have on freight and transport businesses.
Examines the short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses.
The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Freight Transport reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.