Philippine peso under pressure as country posts record trade deficit
The Philippines posted a record trade deficit in November as imports from machines to steel and iron climbed while exports faltered, adding pressure on the currency.
The trade deficit was $3.8 billion, preliminary data from the Philippine Statistics Authority showed on Wednesday. That is the widest since at least 1980, according to data compiled by Bloomberg.
President Rodrigo Duterte’s $180 billion infrastructure program is boosting demand for imports of machines and raw materials with the central bank forecasting a third consecutive annual current-account deficit in 2018, removing a key pillar of support for the currency.
“2018 is supposed to be a banner year for government infrastructure projects,” said Emilio Neri, an economist at Bank of the Philippine Islands in Manila. “It should again translate to further expansion in capital importation. The adjustment that will follow is on the currency.”
The peso fell 0.1 percent to 50.34 against the dollar in Manila. The currency is down 1.7 percent in the past 12 months, the worst performer in Asia, according to data compiled by Bloomberg.