As imports continue to outpace exports trade deficit widens in Oct

MANILA, Philippines - Despite sustained export growth in October, the country’s trade balance remained in a deficit as imports continued to outpace outbound shipments, the Philippine Statistics Authority (PSA) reported yesterday.

Based on trade figures for the month of October, the value of merchandise exports reached $4.76 billion while that of imports reached $6.92 billion, widening the trade gap to $2.16 billion from $1.94 billion in the same month last year.

Exports, however, managed to grow for the second straight month since recovering in September. Sluggish global demand has dampened outbound sales which have been on the downtrend since April last year.

The PSA attributed growth to increased outbound shipments of coconut oil, metal components, mineral products, electronic equipment and parts, electronic products, and wiring sets used in vehicles.

Most of the goods were shipped to China, Hong Kong, Thailand, Taiwan, Malaysia, US, Netherlands, Mexico and France.

Total exports from January to October were still 5.3 percent lower to $46.45 billion from $49.01 billion in the same period last year.

The growth in imports, meanwhile, was traced to increased inbound shipments of various capital and consumer goods such as transport equipment, iron and steel, miscellaneous manufactured articles, mineral fuels, plastics, food and live animals, and industrial machinery and equipment.

Cumulative imports in the 10-month period this year amounted to $66.43 billion, up 13 percent from $58.73 billion a year ago.

Socioeconomic Planning Secretary Ernesto Pernia said there is huge potential for export of high value goods to China such as mango, coconut, dragon fruit as well as fishery products, including lapu-lapu, crabs, shrimps, prawns and tuna.

The country’s improving relationship with Russia is also expected to spur growth in the exports sector, he added.

“Russia committed to import around $2.5 billion worth of Philippine fruits, grains and vegetables in the next 12 months,” said Pernia.

Amid the anemic growth in the global economy, Pernia said it is important for the Philippines to harness opportunities offered by the ASEAN bloc especially with its ties with China, Japan, Korea, India, Australia and New Zealand.

He said the country should also maximize its bilateral ties with Japan, European Free Trade Association as well as the benefits under Europe’s Generalized Scheme of Preferences.

Aside from taking advantage of existing foreign trade agreements, Filipino exporters should also remain proactive in driving up product differentiation, innovation, and diversification especially that there will be stronger integration in the ASEAN region soon,” said Pernia.