PHL share of world trade to grow in next 3 years – WB

January 27, 2013 3:03pm

The Philippines and other developing countries will increase their contribution to global trade in the next three years despite weaker world output, the World Bank said.

“Developing countries' trade shares and contribution to export and import growth will continue [to] expand,” said the multilateral lender's recently released “Global Economic Prospects” report, projecting developing country imports to grow 8 percent on average annually from 2013 to 2015, compared to 5.9 percent for high-income countries.

The report pointed to the “dynamic growth of South-South trade”—developing country exports to other developing countries—as being a major factor in the growth of exports for the sector.

“The recent up tick in developing country exports has been mostly supported by increased South-South trade as import demand from high-income countries was still contracting as of October, albeit at a weaker pace than in the third quarter,” it said.

The report projects that developing countries' share in world trade will grow to 35 percent by 2015, mostly thanks to South-South trade. “As of 2002, SouthSouth trade accounted for only 39.2 percent of total developing country exports, but by 2010 this share had topped 50 percent – meaning that for developing countries, other developing countries are now more important trading partners than high-income countries,” it said.

The report also noted that developing countries are becoming increasingly important for high-income countries as well: “Since 2000, North-North trade has been expanded on average by only 7.3 percent over the past decade, whereas high-income-country exports to developing economies has increased at an annual average pace of 11.8 over the past decade,” it said.

The report projects a 5.8-percent GDP growth for the major ASEAN countries in 2013, with the expected recovery of world trade, and a 5.9-percent growth in 2014 and 2015, with Philippine growth remaining “robust” at around 6 percent.

However, the report also emphasized that there are risks that could derail world trade in years to come, including “Euro Area tensions, the fiscal cliff in the United States and a sharp decline in Chinese growth” as well as Japan's current weakness. — BM, GMA News