Trade gap widens 93% in August

MANILA, Philippines – The country’s trade deficit widened 93 percent to $2.023 billion in August from $1.048 billion in the same period last year as exports continued to decline while imports surged, the Philippine Statistics Authority reported yesterday.

Dollar receipts from shipments of locally-made goods tumbled 4.4 percent to $4.904 billion in August from $5.127 billion a year ago, while imports  surged by a double digit rate of 12.2 percent to $6.927 billion from $6.176 billion.

The trade gap in August, however, was narrower than the $2.058 billion deficit recorded in July.  

The National Economic and Development Authority (NEDA) attributed the   double-digit growth of merchandise imports  to the hefty increases in consumer goods, which grew 59 percent, and capital goods, which grew 29.9 percent.

NEDA officer-in-charge and deputy director-general Rosemarie Edillon said this reflects strong domestic economic activity and as such, the government should promote an environment conducive to growth.

“Strong domestic activity is expected to underpin demand for imports for the latter part of this year. The government should maintain a conducive environment for growth and continue addressing logistical bottlenecks to ensure the smooth flow of trade,” Edillon said.

Also, products of neighboring Asian economies drove up the country’s import payment. Hefty increases in imports from Indonesia, Thailand, China, Japan, South Korea, Hong Kong and India were observed.

On the other hand, the country’s exports of commodity groups like manufactures, agro-based products and petroleum products experienced negative growth rates. But the decline in exports for August was slower than the double-digit declines observed in June and July.

“Given the sluggish external environment, the country should focus on diversifying its export markets and improving productivity and competitiveness of industries. With traditional export markets such as Japan and the US still showing weak appetite for Philippine exports, new markets should be explored,” the NEDA official said.

But mineral products, which grew 10 percent, and electronics, which grew 11.6 percent, mitigated the decline in total outbound shipments for August.

Exports to East Asia, particularly Hong Kong, China and Taiwan, posted increases and exports to France and Switzerland continued to post double-digit growth rates, 78.1 percent and 68.6 percent, respectively. This cushioned the decline in receipts from other trading partners.

On pushing the country’s exports sector, Edillon urged to tap new markets such as Russia and Kazakhstan, which are being eyed as potential destinations for agriculture and industrial products. She also urged to tap emerging markets like Kuwait, Mongolia and Malaysia.