Trade gap widens 163% in November

MANILA, Philippines – The country’s trade deficit widened by 163 percent in November due to the steep growth in imports and contraction in exports, the Philippine Statistics Authority (PSA) reported yesterday. Total merchandise trade grew 7.3 percent year-on-year in November to $12 billion due to the surge in trade transactions with East Asia and ASEAN regions, the agency said.

Import payments rose 19.7 percent to $7.3 billion in November from $6.1 billion in the same period a year ago due to increased demand for capital goods, consumer goods, raw materials and intermediate goods, as well as mineral fuels and lubricants. Imports are expected to grow faster next year due to a number of large construction projects lined up this year.

Exports earnings, on the other hand, declined 7.5 percent to $4.7 billion from $5.12 billion a year ago due to the decrease in value of manufactured goods such as electronics.

The balance of trade in November 2016, hence, registered a deficit of $2.57 billion, up from $976.87 million in the same month last year.

In the 11 months to November last year, total imports rose 13.7 percent to $73.72 billion while exports contracted 5.2 percent to $51.36 billion.

Socioeconomic Planning Secretary Ernesto Pernia said exports may return to positive growth territory this year because of strengthened economic relations with China and Russia as well as improvements in the economies of traditional trading partners Japan and United States.

“Manufacturing is doing well so in terms of supply to exports so that would not be a constraint. It would be the demand for exports (that will be a challenge),” he told reporters in Makati City yesterday.

“The US economy is on an uptrend and Japan is also not in the doldrums anymore. Europe is also picking up so I think it (trade) will probably be better,” he added.

China’s commitment to import more agricultural food products from the Philippines as well as Russia’s potential as a new destination for Philippine crafts would help pull up exports, he said.

“While we are expanding our trade relations with potential markets, we need to further harness our existing free trade agreements and continue to push for reforms. This will improve our business environment and increase our attractiveness to foreign investors,” said Pernia.

He also said the positive global growth outlook paired with the upcoming ASEAN integration is the perfect opportunity to expand the Philippines’ exports portfolio.

“We must continue to develop our infrastructure and encourage product differentiation and quality upgrading to prepare our micro, small, and medium enterprises, for the upcoming increase in demand from our new trading partners,” he said.