PHL trade gap expands to $3.25B in October

The Philippine trade gap expanded in October from a month earlier, as the country continued to import more, data released by the Philippine Statistics Authority (PSA) on Tuesday showed.

The balance of trade in goods registered a $3.25-billion deficit in October, than the $3.12-billion deficit in September but narrower than the $4.42-billion deficit in October 2018.

External trade—the total value of import and export receipts—in October amounted to $15.89 billion, a 6.7% decline from $17.03 billion year-on-year.

Export shipments reached $6.32 billion, reflecting a 0.1% increase from $6.31 billion in October 2018.

Increases were recorded in travel goods and handbags (+155.9%); other mineral products (+84.9%); gold (+52.9%); fresh bananas (+15.7%); electronic products (+7.0%); other manufactured goods (+4.6%); ignition wiring set and other wiring sets used in vehicles, aircraft and ships (+2.0%).

Imports contracted by 10.8% to $9.57 billion from $10.72 billion, led by iron and steel (-31.7%).

Declines were also seen in cereals and cereal preparations (-18.1%); industrial machinery and equipment (-14.6%); mineral fuels, lubricants and related materials (-13.3%);  electronic products (-11.7%); plastics in primary and non-primary forms (-11.5%); other food and live animals (-5.6%); transport equipment
(-3.4%), and miscellaneous manufactured articles (-2.7%).

“The modest recovery in the country’s trade figures for October 2019 backs the expectations that the export sector will remain relatively steady despite the global slowdown associated with the US-China trade war,” Socioeconomic Planning Secretary Ernesto Pernia said in a separate statement.

“This also aligns well with the country’s overall GDP growth target of 6.0 to 7.0 percent for 2019,” he added.

Pernia noted the trade tensions between the world’s two biggest economies could have a spillover effect on the Philippines.

“Possible downside risks, particularly the lingering vulnerabilities and spillovers associated with the trade tensions, need to be managed,” he said.

To counter such external risks, Pernia noted the need to improve competitiveness through institutionalization of policies to streamline, facilitate, and bring down the cost of doing business.

“We need to take advantage of the country’s capacities on key products and building skills expertise and economies of scale to adapt and harness the benefits from emerging technologies like robotics and artificial intelligence,” he said.

“This will also enable the sector to climb a notch in the global value chain and transition into more value-adding and specialized production,” added Pernia. —VDS, GMA News