‘Imports still reflect domestic demand’
The Philippines’ trade deficit widened in February from a year earlier as imports remained bigger than the country’s outbound shipments, official data showed on Tuesday.
“The balance of trade in goods (BOT-G) for the Philippines in February 2017, however, registered a deficit of $1.728 billion, higher than the $1.104-billion trade deficit in the same month last year,” the Philippine Statistics Authority (PSA) said in a statement.
Based on these figures, the trade deficit in February rose by 56.6 percent from the year-ago level. Compared with the $2.46-billion trade gap in January, the February balance contracted by 30 percent.
Exports in the February rose 11 percent year-on-year to $4.78 billion, while imports surged 20.3 percent to $6.51 billion, data from the PSA showed.
In the first two months of 2017, the country’s trade balance also expanded 12.2 percent to $4.19 billion from $3.74 billion a year ago.
Imports data encouraging
Focusing on imports data, Singaporean bank DBS said that at the current pace, full-year inbound shipment growth is on track to top 10 percent once again after coming in at 13.7 percent last year.
“This is yet another encouraging data this year. We continue to see upside risks to our current GDP [gross domestic product]growth forecasts of 6.4 percent and 6.7 percent in 2017 and 2018 respectively,” it said.
DBS noted that over the past three months, monthly imports of capital goods have averaged as much as 70 percent higher than the amount recorded at the start of 2015, while. Imports of consumer goods are up by some 37 percent in the same period.
“Compared to the 12 percent rise in imports of intermediate goods during the same period, it is clear that the strong showing in import growth has been driven mainly by the robust domestic demand,” it said.
The National Economic and Development Authority (NEDA) noted that double-digit growth in exports and imports pushed up total merchandise trade of the Philippines by 16.1 percent.
Citing the PSA report, it said total trade grew to $11.3 billion, backed by imports growing by 20.3 percent and exports growing by 11 percent. It was the second consecutive double-digit growth this year.
“We see this as a strong follow-through to the 14.2-percent growth of total Philippine trade recorded in January, keeping our country’s economy on-track in sustaining its momentum of growth,” said Socioeconomic Planning Secretary Ernesto Pernia.
Exports earnings rose to $4.7 billion, mainly driven by growth in volume of manufactured goods (6.2 percent), mineral (99.5 percent), and petroleum products (224.6 percent).
“The healthy growth in Philippine exports was mainly driven by higher exports to East Asian countries, [accounting for a]48.3-percent share in total exports. Receipts from Hong Kong and China surged by 66 percent and 24.7 percent, respectively,” the Cabinet official said.
He also noted that Philippine exports to Association of Southeast Asian Nations (Asean) countries grew by 18.8 percent in the same period, a good sign that the country was forging stronger connections with its Asian neighbors.
Also, import payments grew to $6.5 billion in the same period, led by the volume increase in the purchases of mineral fuels and lubricants (97.3 percent), raw materials and intermediate goods (7.9 percent), capital goods (18 percent), and consumer goods (21.5 percent).
“The performance of trade in the first two months of the year is a good indication that we are on an upward trajectory. With [its]Asean chairmanship and China’s rebalancing to a more consumer-oriented growth, the Philippines is expected to have expansions in terms of products and markets,” said Pernia.
To ensure the sustainability of growth, efforts should be exerted to improve the competitiveness of the country’s exports, he said.