PHL trade deficit widens by 61.6% to $2.56B in December

The Philippines's balance of trade in goods widened by 61.6 percent in December 2016 from a year earlier, data released by the Philippine Statistics Authority (PSA) on Friday showed.

"The balance of trade in goods for the Philippines in December 2016, registered a deficit of $2.564 billion, higher than the $1.586 billion trade deficit in the same month last year," the statistics office said.

A trade deficit indicates that the cost of the country's imports exceeded export receipts.

Imports expanded by 19.1 percent to $7.435 billion, while exports rose by 4.5 percent to $4.871 billion.

Despite the deficit, the National Economic and Development Authority (NEDA) said that merchandise trade for the whole of 2016 grew by 5.8 percent from a 2015. Data from the PSA showed total trade reached $137.4 billion.

“This means that we need to keep diversifying and exploring new markets, in addition to fully tapping our existing trade agreements to push further our upward trajectory,” Socioeconomic Planning Secretary Ernesto Pernia said in a separate statement.

Pernia emphasized the growth in exports, which is propelled by positive growth in all major commodities, led by agriculture-based products, petroleum and mineral products and manufactured goods.

“This demonstrates the recovery of our agricultural sector from the effects of the El Niño. It also indicates the positive contributions of mining and petroleum to the economy. This implies that we will have to find a wholesome balance between mining development and environmental protection” the Cabinet official said.

The country’s export receipts largely from China (36.6 percent) and Taiwan (10.5 percent), which helped offset the decline other markets.

Only Vietnam and the Philippines posted positive gains in merchandise trade as other selected Asian countries remained weak in 2016, Pernia said.

“If we want to continue being at the forefront, we need to create policies that enhance and expand opportunities for industries, expand our infrastructure and shift to a knowledge-based economy. We also need to push for reforms that will sustain growth such as the comprehensive tax reform package, which could provide additional impetus to consumption and investment,” Pernia said. — Ted Cordero/VDS, GMA News