Exports to UAE, India grow 286.4% and 204.1%, respectively
The Philippines’ trade deficit in April narrowed from a year earlier and from March as imports declined amid a double-digit expansion in exports, official data showed on Friday.
“The country’s balance of trade in goods (BoT-G) registered a $2.052 billion deficit in [April] 2017, lower than the $2.580 billion deficit in April 2016,” the Philippine Statistics Authority (PSA) said in a statement.
Based on these figures, the trade deficit in April narrowed by 20.5 percent from the year-ago level. Compared with the $2.29-billion trade gap in March, the April deficit was 10.6 percent smaller.
Exports in April rose 12.1 percent year-on-year to $4.80 billion, while imports dropped 0.1 percent to $6.85 billion, the PSA data showed.
In the first four months of 2017, however, cumulative trade deficit expanded by 2.4 percent to $8.58 billion from $8.38 billion a year ago.
Lower full-yr deficit seen
ING Bank Manila senior economist Joey Cuyegkeng said the trade balances were adjusting to high growth of imports of capital equipment and consumer goods the past two years while exports were recovering.
Cuyegkeng said supporting his view is the 2.4 percent year-on-year fall in the four-month deficit, and the 15.3 percent rise in the January to April exports, which surpassed the 11.1 percent end-April growth in imports.
“We are reviewing our trade deficit forecast of almost $30 billion this year for a possible downward revision,” he said.
Focusing on imports data, Land Bank of the Philippines market economist Guian Angelo Dumalagan said inbound shipments contracted as domestic demand slowed this year in the absence of election spending, which accounted for a higher comparative base last year.
“An increase in exports might be accompanied by a decrease in imports, especially since domestic demand might decelerate from last year’s election boost,” he explained.
Overall, he said external trade might contribute to growth in the second quarter of 2017 due to expectations of stronger demand from foreign countries.
NEDA optimistic on total trade
Focusing on total trade in April, the National Economic and Development Authority (NEDA) said it is optimistic about the country’s performance for the rest of the year, considering thriving exports and trade linkages, especially to Europe and East Asia.
Citing the PSA data, the NEDA said total trade grew to $11.7 billion in April 2017, with 12.1 percent growth in exports offsetting the 0.1 percent decline in imports.
“For exports, East Asia and the EU [European Union] remain the top destinations of our products, accounting for 62.3 percent of total export receipts,” Socioeconomic Planning Secretary Ernesto Pernia said in a statement.
Exports to EU and East Asia grew 36 percent and 10 percent in April 2017, respectively, it noted.
“Despite global uncertainties, we remain upbeat that the country will sustain the strong performance of export and trade growth recorded in the first quarter,” Pernia said.
Meanwhile, the NEDA reported double-digit growth in the sales of exports to Hong Kong (36.8 percent), China (26.4 percent), South Korea (18.9 percent), and Taiwan (26.4 percent), while exports to Japan fell (-16.6 percent).
“We aim to deepen our engagement with our neighbors in the Asia-Pacific region to enhance trade and investment links,” Pernia said.
He recognized the positive contributions of trade connections, citing China as an example, where the Philippines’ merchandise exports rose 27.7 percent from October 2016 to April 2017, rebounding from a 7.1 percent decline from January to September 2016.
“Also worth noting is the tripling of exports to the UAE [United Arab Emirates] and India in April. This was the third month that receipts to UAE tripled, and the second month for India,” he added.
Exports to UAE and India grew 286.4 percent and 204.1 percent, respectively.
“We see an opportunity to strengthen bilateral ties with India as it becomes a major player in the global economy. Their large consumer base can be an important market for Philippine products,” he added.