The Philippines’ trade deficit expanded 45.9 percent in September from a year earlier as the surge in imports continue to outpace the rebound in exports, government data showed on Thursday.
An economist views a rebound in exports signifying the start of increased momentum in external demand.
“The balance of trade in goods for the Philippines in September 2016 registered a deficit of $1.890 billion, higher than the $1.296 billion trade deficit in the same month last year,” the Philippine Statistics Authority (PSA) said in a statement released with the trade data.
The 5.1 percent year-on-year growth in export sales was surpassed by the 13.5 percent rise in imports. Export receipts reached $5.21 billion in September, while import payments totaled $7.10 billion.
The trade gap in September, however, was narrower than the $1.95 billion deficit in August.
“There are signs of a turnaround in external demand . . .” said Moody’s Analytics economist Jack Chambers, noting the 5.1-percent growth in merchandise exports in September.
“Exports should continue to improve due to the stabilization of the Chinese economy and the upswing in global tech demand,” he said.
The National Economic and Development Authority (NEDA) said the growth in exports was due to upticks in all commodity groups, except forest products.
“Exports of manufactured products may continue to firm-up in the near term, possibly riding on the growth of the global industry sector,” said Socioeconomic Planning Secretary Ernesto Pernia.
Philippine exports rose as revenues from manufactures (4.8 percent), agro-based (24 percent), petroleum (71.7 percent), and mineral products (4.7 percent) recorded year-on-year expansions.
The NEDA said most Asian countries posted positive gains in exports in September, pointing to a recovery in global trade.
“Recent developments in China and Japan, which are the Philippine’s largest trading partners in Asia, provide good prospects for merchandise trade. The steady growth of China’s economy is a welcome development, and the Japanese government also appears to be on track to reviving its economy,” Pernia said.
Aside from lifting the ban on bananas, China also announced its intention to buy more high-value commercial crops from the Philippines, like mangoes and coconut, as well as high-end fishery products like lapu-lapu, crabs and tuna.
Meanwhile, the NEDA said the double-digit growth of merchandise imports in August 2016 can be attributed to hefty increases in capital goods, which grew by 15.8 percent, and consumer goods, which grew by 47.7 percent.
The expected upticks in prices of petroleum crude may push Philippine import payments higher in the near- to medium-term. The strong outlook of the domestic economy is also seen propping up purchases of imported goods.
“Amid these mixed developments and with risks mostly on the downside, the Philippines will continue to focus on bringing Philippine exports to more diverse markets,” Pernia said.
“Along with our improved bilateral relations with China, the country will correspondingly maximize opportunities from existing free trade deals, most notably the recently signed Philippines-European Free Trade Association agreement,” the NEDA chief added.
In the first nine months of 2016, the country’s trade gap widened by 130 percent to $17.81 billion from $7.73 billion a year earlier.
Total merchandise exports in January to September registered a 6.2 percent decline at $41.69 billion from $44.46 billion in the corresponding period in 2015.
Cumulative imports amounted to $59.5 billion, an increase of 14 percent from $52.19 billion in the same comparable period.
The PSA said total trade in September grew by 9.8 percent at $12.31 billion from $11.21 billion a year earlier, pushing the nine-month value to $101.19 billion.