Trade deficit widens in March to $3.14 billion

The country’s trade deficit widened in March this year as imports continued to accelerate while exports are declining, data from the Philippine Statistics Authority (PSA) showed yesterday.

According to the PSA, the nation’s balance of trade in goods saw a $3.14billion deficit during the month, which is higher by 34 percent compared with $2.34 billion in the same month last year.

In March, imports reached $9.01 billion, an increase of 7.8 percent yearon-year from $8.36 billion as seven out of the top 10 imported goods posted a positive growth.

Based on the PSA data, imported cereals and cereal preparations rose 97.9 percent; miscellaneous manufactured articles up 43.5 percent; telecommunication equipment and electrical machinery grew 37.2 percent; and other food and live animals jumped 33.5 percent.

Likewise, import receipts of plastics in primary and non-primary forms improved by 14.2 percent, while industrial machinery and equipment grew 11.1 percent, and electronic products saw a 6.5 percent increase.

On the other hand, total export sales fell in March by 2.5 percent to $5.88 billion from $6.02 billion in the same month in 2018.

Among the 10 major exports of the country, four goods were on the negative territory, including machinery and transport equipment with -10.2 percent; other manufactured goods with -8.1 percent; electronic products with -3.7 percent; and metal components with -1.2 percent.

Amid the widening trade gap, Socioeconomic Planning Secretary Ernesto M. Pernia urged local producers to continue to diversify products and earnestly look for new markets, especially abroad, to ratchet up Philippine exports.

“To drive up exports, we are encouraging exporters to continue to diversify products to expand their markets. To match this effort, the government continues to explore non-traditional markets such as Eastern European countries and is seeking to strengthen ties with traditional trading partners,” Pernia said.

He noted that to this end, the Export Marketing Bureau of the Department of Trade and Industry is looking at nonelectronic products such as cars, desiccated coconut, coconut oil, and footwear and wearables, among others, as new export growth drivers.

“Recently, the Philippines has also secured a commitment from the UK on continuing the same level of market access to UK post-Brexit, similar to the EU’s Generalized Scheme of Preferences,” Pernia said.

In addition, the Philippines and the Republic of Korea arrived at a common understanding to pursue a bilateral free trade agreement and could possibly conclude the negotiations in time for the 2019 Republic of Korea-ASEAN Commemorative Summit in November 2019.

Meanwhile, in terms of exports to major trading partners in March, receipts from ASEAN countries grew by 2.7 percent, supported by stronger outturns in shipments to Malaysia, Vietnam, and Indonesia.

On the other hand, exports to East Asia, US, and EU declined by 0.4 percent, 3.1 percent, and 17.2 percent, respectively.

“To put the Philippines in a more competitive stance, it is crucial to open up domestic sectors to foreign participation through the proposed amendments to the Foreign Investment Act, Retail Trade Act, and Public Services Act,” Pernia said.

This will help attract multinational firms to invest and set up their manufacturing operations in the country, he noted. The resulting expanded local production would help cater to the needs of both domestic and external markets.