The Philippines’ trade deficit widened in October from a year earlier as imports continued to outpace exports, rising on the back of increasing local demand for fuel products, as well as capital and consumer goods, official data showed on Friday.
The trade gap in October was also wider than the $1.89 billion deficit in September.
“The balance of trade in goods (BOT-G) for the Philippines in October 2016 registered a deficit of $2.163 billion, higher than the $1.944 billion trade deficit in the same month last year,” the Philippine Statistics Authority (PSA) said in a statement released with the trade data.
The 3.7 percent year-on-year growth in exports to $4.7 billion in October was outpaced by the 5.9 percent rise in imports to $6.92 billion, the PSA said.
Separately, the National Economic and Development Authority (NEDA) said import payments grew following increases in demand for capital goods (13.1 percent), consumer goods (16.6 percent), and mineral fuels and lubricants (22.3 percent).
It also said export earnings rose to $4.8 billion on account of the strong performance of mineral products (15.1 percent) such as copper concentrates and chromium ore, and agro-based products (30.6 percent) like coconut oil, bananas, rubber and fish. Increased receipts recorded were from China, Hong Kong, Thailand, Taiwan, Malaysia, the United States, the Netherlands, Mexico and France.
NEDA Director General and Socioeconomic Planning Secretary Ernesto Pernia is confident of brighter prospects for exports in the year ahead, counting on closer Philippine ties with China and Russia.
Positive for Philippine exports is the lifting of the Chinese ban on Philippine bananas and mangoes, and the $100-million contract for fruit exports to China in a deal reached with Beijing during President Rodrigo Duterte’s state visit there in October, he said.
He also cited the huge potential for China-bound exports of high-value crops such as mango, coconut, and dragon fruit, as well as that of fishery products, including lapu-lapu, crabs, shrimps, prawns and tuna.
“The country’s improving relationship with Russia will also spur growth in the exports sector, as Russia committed to import around $2.5 billion worth of Philippine fruits, grains, and vegetables in the next twelve months,” he added.
Pernia said he is hopeful about the global economy especially given the good jobs data in the US recently.
Nonetheless, he said it is important for the Philippines to harness opportunities offered by the Association of Southeast Asian Nations (Asean) bloc’s ties with China, Japan, Korea, India, Australia and New Zealand.
“We must also maximize our bilateral ties with Japan and the European Free Trade Association, including Europe’s Generalized Scheme of Preferences. And aside from taking advantage of existing foreign trade agreements, Filipino exporters should also remain proactive in driving up product differentiation, innovation, and diversification especially that there will be stronger integration in the Asean region soon,” he added.
In the first 10 months of 2016, the country’s trade gap expanded by 106 percent to $19.97 billion from $9.67 billion a year earlier.
Total merchandise exports from January to October fell 5.3 percent to $46.44 billion from $49.05 billion in the corresponding period in 2015.
Cumulative imports climbed 13.1 percent to $66.42 billion from $58.72 billion in the comparable period last year.
The PSA said total trade in October grew 5 percent to $11.67 billion from $11.12 billion a year earlier, pushing the 10-month total to $112.87 billion.