Record trade deficit adds to pressure
MANILA: The Philippines posted a record trade deficit in November last year as imports from machines to steel and iron climbed while exports faltered, adding pressure on the currency.
The trade deficit was US$3.8 billion (RM15.2 billion), preliminary data from the Philippine Statistics Authority showed yesterday. That was the widest since at least 1980, according to data.
President Rodrigo Duterte’s US$180 billion infrastructure programme is boosting demand for imports of machines and raw materials with the central bank forecasting a third consecutive annual current-account deficit this year, removing a key pillar of support for the currency.
“(The year) 2018 is supposed to be a banner year for government infrastructure projects,” said Emilio Neri, an economist at Bank of the Philippine Islands. “It should again translate to further expansion in capital importation. The adjustment that will follow is on the currency.”
The peso fell 0.1 per cent to 50.34 against the US dollar as of 9.53am, here. The currency is down 1.7 per cent in the past 12 months, the worst performer in Asia, according to Bloomberg data.
Exports rose 1.6 per cent from a year ago versus estimate of nine per cent. That was the slowest pace since a contraction in November 2016, according to data. Imports climbed 18.5 per cent from a year ago versus estimate of 9.7 per cent.
That was the fastest pace since December Imports of telecommunication equipment and electrical machinery gained 32.8 per cent imports of iron and steel rose 26.4 per cent trade deficit with China was US$1.2 billion. Bloomberg