Trade gap narrows to $3.35 billion in June

The country’s trade deficit slightly narrowed in June this year as exports continued to contract while imports sustained its robust expansion, the Philippine Statistics Authority (PSA) reported yesterday.

A trade deficit of $3.35 billion was recorded by the Philippines last June after its exports declined 0.1 percent to $5.7 billion, while imports accelerated by 24.2 percent to $9 billion year-on-year.

The latest trade deficit figure, however, was lower compared with the $3.7-billion gap in May but was higher than $1.59 billion during the same month last year.

Following the contraction, the National Economic and Development Authority said that promotion and development of Philippine exports should be more aggressive to help in continuing the country’s strong trade performance.

“Creating a broader market base for exports through effective trade facilitation and by effectively utilizing existing free trade agreements, as well as forging new ones, are important in improving our export market moving forward,” Socioeconomic Planning Ernesto M. Pernia said.

Exports declined for the sixth consecutive month, albeit only marginally in June, as higher revenues from manufactures, forest products, and petroleum slightly offset lower receipts from mineral and agro-based products.

Merchandise imports growth remained strong as all commodity groups posted hefty gains.

Pernia said that the government needs to ensure that the country’s National Single Window is already operational in 2018 as programmed.

This sets up necessary infrastructure that will seamlessly connect relevant agencies involved in processing export and import permits and other trading requirements.

The recent signing of a memorandum of understanding between the trade officials of the Philippine government and the United Arab Emirates to create a more enabling trading environment is also a positive development, particularly in terms of halal goods accreditation.

There is also progress in the negotiations on a possible US-Philippines Free Trade Agreement in a bid to expand markets for the country’s agricultural products like carrageenan and seaweed, as well as for garments and textiles.

“We should also negotiate for lower tariffs with other trade partners. In the case of bananas for instance, the reduction in tariffs will enable the country to compete with other banana exporters,” Pernia said.

Apart from expanding market access, unfair logistics pricing should also be addressed.

The Department of Trade and Industry has recently called on the Philippine Competition Commission to review shipping charges of foreign shipping lines, as excessive logistics costs undermine the competitiveness of traders. (CSL)