The Philippines' trade in goods deficit swelled by 124.14 percent in September, as imports continued to grow while exports registered a decline, the Philippine Statistics Authority (PSA) reported Wednesday.
"The country’s balance of trade in goods increased to a $3.93 billion deficit in September 2018, from the $1.75 billion deficit in September 2017," the PSA said.
University of Asia and the Pacific School of Economics dean Cid Terosa said the September trade gap "should be one of the highest if not the highest in recent years."
"A wider trade gap can lead to a BOP [balance of payments] deficit which can help weaken the peso and exert upward pressure on prices, interest rates, and wages," Terosa said.
A deficit indicates that the value of the country’s imports exceeded that of its exports.
Exports declined by 2.6 percent to $5.83 billion from $5.99 billion year-on-year.
Meanwhile, imports surged 26.1 percent to $9.75 billion from $7.77 billion on the back of shipment of raw materials and intermediate goods, capital goods, consumer goods, and mineral fuels and lubricants.
"It is expected because we have imported quite a lot than what we exported due to the measures implemented by the government to increase aggregate supply to taper inflation," independent economic consultant John Paolo Rivera said.
"The continuous 'Build, Build, Build' also contributed to this," Rivera said.
The country's total merchandise trade grew by 13.5 percent to $15.58 billion from $13.72 billion.
"The country’s total merchandise trade grew stronger in September 2018 due to robust imports of capital goods, which is vital for the long-term growth of the domestic economy," National Economic and Development Authority (NEDA) chief and Socioeconomic Planning Secretary Ernesto Pernia said in a statement.
“The growth in import of capital goods could indicate that firms are making long-term investments. The import of raw materials and intermediate goods could also indicate the vibrancy of the manufacturing sector as it is expected to sustain its positive growth in the remaining months of the 2018,” Pernia said.
The Cabinet official said the country's import payments are seen to remain elevated until 2019, primarily due to imports of capital goods and raw materials to sustain the government’s Build, Build, Build infrastructure and manufacturing resurgence programs. — BM, GMA News