Trade gap widens year-on-year in June amid sharp rise in imports

MANILA, Philippines — The Philippines posted a wider year-on-year trade deficit in June after exports went down while imports rose to its fastest pace this year, the government’s statistics agency reported Wednesday.

Total exports sagged by 0.1 percent in June to $5.700 billion from $5.704 billion a year ago, while imports surged 24.2 percent to $9.05 billion.

That resulted in a trade gap of $3.35 billion, higher than the $1.59 billion deficit a year ago but slightly narrower than the previous month’s $3.7 billion. Total external trade in goods in June jumped 13.5 percent to $14.75 billion.

Broken down, exports declined due to decreases posted by four out of the top 10 commodities for the month. Export shipments to Japan, a major trading partner, dipped by 31.8 percent.

Meanwhile, total import bill in June was lifted by heightened purchases of iron and steel, electronic products, mineral fuels and cereals.

Philippine President Rodrigo Duterte’s plan to keep his country’s growth engine humming by spending more than P8 trillion on infrastructure has been fueling demand for imports of construction-related goods.

The increasing capital goods imports due to the infrastructure boom have reversed the country’s current account surplus to a deficit, pressuring the Philippine peso.

Year-to-date, the peso has weakened by more than 5 percent against the greenback, making it one of Asia’s worst performing currencies so far this year.