Trade deficit widens in January
MANILA, Philippines — The Philippines posted a wider trade deficit in January, the country’s statistics agency reported Tuesday, as exports contracted and imports surged.
Trade gap in the first month of 2019 stood at $3.76 billion, bigger than $3.16 billion deficit recorded a year ago.
Broken down, exports slumped 1.7 percent year-on-year to $5.28 billion in January from $5.37 billion while imports rose 5.8 percent to $9.03 billion during the month from $8.54 billion a year ago.
“Imports will likely continue to grow, albeit at a more subdued pace in 2019,” ING Bank Senior Economist Nicholas Mapa said.
“On the export side, outbound shipments remain heavily dependent on the electronics trade. The rise in raw materials imports for electronic exports appears to be increasing in dollar terms, which should give hope for a turnaround in 2019,” Mapa added.
The trade gap in the Philippines has been yawning since 2017 amid a rise in imports to feed the Duterte government’s ambitious infrastructure program, reversing the nation’s current account surplus to a deficit and pressuring the peso.
The country’s economic managers have repeatedly said high imports would “support domestic economic expansion.” They also said several episodes of peso depreciation would give the export sector a boost.
“However the ongoing trade war means that the Philippine export sector will need to continue to build on sector-changing reforms to help boost productivity, by enhancing supply chains and increasing standards,” ING Bank’s Mapa said.
“With the government’s ‘Build Build Build’ initiative seen to help boost efficiencies, perhaps the export sector can take advantage of this push and we can see the export renaissance that we’ve all been waiting for,” he added. — Ian Nicolas Cigaral
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