Trade gap further swells in August 2018

MANILA, Philippines — Despite exports growing for the third straight month, the country’s trade deficit widened to $3.51 billion in August as imports growth continue to outpace exports, the Philippine Statistics Authority (PSA) reported yesterday.

Total exports grew by 3.1 percent to $6.16 billion last August, while imports went up by a faster 11 percent to $9.68 billion.

This caused the country’s balance of trade in goods to register a $3.51 billion deficit in August, up from the $2.74 billion gap last year.

For the first eight months of 2018, the trade deficit rose to $26 billion from $15.79 billion in the same period last year. 

Electronic products remained the country’s top dollar earner in August with total revenues of $3.35 billion, up by seven percent from the $3.13 billion export receipts last year. This made up 54.3 percent of exports revenue during the period.

Other top exports during the period were machinery and transport equipment, fresh bananas, copper cathodes, ignition wiring sets, chemicals, and metal components.

Inbound shipments of electronic products in August 2018 dominated imports, with payments rising 10 percent to $2.46 billion from $2.24 billion previously. This comprised 25.4 percent of total imports during the reference period.

Other top imports during the period were transport equipment, mineral fuels, industrial machinery, iron and steel, food and live animals, cereals, telecommunication equipment, manufactured products, and plastics.

Top export destinations for Philippine products in August were China, US, Hong Kong, Japan and Singapore.

Completing the top 10 market destinations for August 2018 were Germany, Taiwan, Thailand, Netherlands, and Korea.

The Philippines registered a trade deficit with China as exports registered at $939.98 million versus imports of $1.92 billion. Both inbound and outbound shipments grew in August.

Trade surplus was seen with the US as total exports valued at $934.04 million outpaced imports of $713.54 million in August 2018. Growth was seen in both inbound and outbound shipments.

Trade deficit remained with Japan with total exports of $846.64 million versus an import value of $857.93 million. Both inbound and outbound shipments were down during the period.

Singapore, also had a trade deficit with the Philippines as exports of $409.81 million were less than imports of $494.17 million in August.

The total import bill is expected to accelerate further in the coming months driven by capital goods to support the government’s Build Build Build program. Payments for oil will also be higher as international prices push upwards the costs of importation, said Rosemarie Edillon, undersecretary of the National Economic and Development Authority (NEDA).

The Philippines, she said, can also hope to attract more investments in manufacturing because of the current trade tensions between US and China have manufacturers examine their options.

 “As trade tensions mount between the US and China, some manufacturing firms may seek to relocate their production, especially to Southeast Asia. This opens up opportunities for the Philippines to become a viable destination for export-oriented firms,” she said.