Philippine trade gap narrows to $2.47B in June

The Philippine trade deficit narrowed in June as export sales continued to outpace imports, the government reported Wednesday.

Data released by the Philippine Statistics Authority (PSA) showed the balance of trade in goods (BoT-G) narrowed to $2.47 billion in June.

This reflects a deficit contraction of 30.42% from $3.55-billion a year earlier.

A deficit indicates that the value of a country’s imports exceeded the export receipts, while a surplus indicates more export shipments than imports.

In terms of exports, sales posted a 1.5% increase at $6.01 billion versus $5.92 billion year-on-year.

“This was due to the increases in export sales of the seven of the top 10 major export commodities,” the PSA said.

Increases were noted in the exports of the following items:

• cathodes and section of cathodes, of refined copper 41.7%
• fresh bananas 24.4%
• gold 10.1%
• electronic products 4.3%
• machinery and transport equipment 3.0%
• other mineral products 1.1%

Total imports fell by 10.4% to $8.48 billion from $9.47 billion.

“The decrease was due to the decrements in nine of the top 10 major import commodities," said the PSA.

Declines were recorded in the imports of the following items:

• iron and steel -40.3%
• cereals and cereal preparations -29.4%
• industrial machinery and equipment -20.7%
• plastic in primary and non-primary forms -16.4%
• transport equipment -12.6%
• telecommunication equipment and electrical machinery -12.2%
• mineral fuels, lubricants and related materials -7.0%
• other food and live animals -6.7%
• miscellaneous manufactured articles -0.1%

“The country’s total external trade in goods in June 2019 amounted to $14.49 billion, reflecting a decrease of 5.8% from $15.39 billion in the same month of the previous year,” the PSA said in an accompanying statement.

Socioeconomic Planning Secretary Ernesto Pernia said the external trade slowdown was partly due to the ongoing trade dispute between China and the United States.

“Despite the challenging external environment, the Philippines has shown resilience in its trade performance,” he said in a separate statement.

However, Pernia said there might be a need to diversify Philippine export markets to drive trade.

“Considering the less optimistic global trade prospects, it is necessary to diversify markets and boost domestic demand to compensate for the weakness of external trade,” he said.

Trade relations with Japan and South Korea are among those that must be strengthened, the Cabinet official noted.

“In light of the current trade spat between Korea and Japan, we need to complete the negotiations for the free trade agreement with South Korea and review the decade-old Philippines-Japan Economic Partnership Agreement to further expand the country’s exports in both markets,” he said.

“Importantly, the government has been fast-tracking the implementation of infrastructure projects under the Build, Build, Build program to enhance trade facilitation and provide logistical support to manufacturers and exporters,” he added.

To spur economic growth, the government plans to spend over P8 trillion on its Build, Build, Build infrastructure program until 2022, largely funded by tax revenue. —VDS, GMA News