PHL trade deficit widens by 93% in August year-on-year— PSA

The Philippine trade deficit expanded by nearly 100 percent in August, reflecting a negative gap in the trade balance for the eighth consecutive month as imports continued to outpace exports, official data showed on Tuesday.

Data released by the Philippine Statistics Authority (PSA) revealed that the country registered a trade deficit of $2.023 billion, wider than the $1.048 billion a year earlier, but narrower than the $2.053-billion deficit in July.

Imports totaled $6.927 billion, up 12.2 percent from $6.176 billion year-on-year, driven by the increase in inward shipments from East Asia.

"The double-digit growth of merchandise imports in August can be attributed to hefty increases in consumer goods, which grew by 59 percent, and capital goods, which grew by 29.9 percent." the National Economic and Development Authority (NEDA) said in a separate statement.

Exports continued to drop in August – albeit slower than in the previous month – following the decline in demand from key markets.

Philippine export receipts amounted to $4.904 billion, down 4.4 percent from $5.128 billion year-on-year.

"The decrease was attributed to seven major commodities out of the top export commodities for the month," the PSA said.

Exports of machinery and transport equipment fell by 52.5 percent, metal components by 25.9 percent, chemicals by 16.2 percent, articles of apparel and clothing accessories by 11.3 percent, other manufactures by 9.3 percent, woodcrafts and furniture by 8.8 percent, and coconut oil by 6.9 percent.

The latest export numbers were an improvement from the 6.3-percent drop in August 2015 and 13.0 percent in July, reflecting a decrease in demand from traditional markets such as Japan, and the US, according to the PSA.

Sluggish demand

Philippine Exporters Confederation Inc. (PhilExport) President Sergio R. Ortiz-Luis Jr. noted the latest numbers were a "big improvement" – considering the country has been registering a trade deficit for more than a year.

"At least -4.4 percent na lang. It's a vast improvement from the previous -13 percent," he said in a phone interview, noting the export industry is hoping to recover from the slump.

"We're just crossing our fingers," he said.

The NEDA said the country needs to diversify its export markets.

"Given the sluggish external environment, the country should focus on diversifying its export markets and improving productivity and competitiveness of industries," said Rosemarie G. Edillon, NEDA officer-in-charge.

"With traditional export markets such as Japan and the United States still showing weak appetite for Philippine exports, new markets should be explored," she added.

Cabinet members of the Duterte administration said recently the country was eyeing Russia and China as key markets for agriculture products.

"We also need to shift to high-value crops as potential agricultural exports. This can be done if we improve agricultural productivity through investments in modernization efforts, infrastructure, and research," Edillon said.

Socioeconomic Planning Secretary Ernesto M. Pernia said earlier the NEDA will zero in on the agriculture and manufacturing sectors under the administration of President Rodrigo R. Duterte.

The Philippines is also sending a delegation to China next week to try to secure possible investments.

"Hopefully maraming iuuwi," said Philexport's Ortiz-Luis, who is joining the Philippine team. — VDS, GMA News