Neda official: Widening trade deficit not a cause for worry

MANILA --National Economic and Development Authority (NEDA) Undersecretary for Policy and Planning Rosemarie Edillon said the country’s widening trade deficit was not a cause for worry.

Edillon said strong demand for intermediate and capital goods drove imports growth.

“Especially if you analyze this side by side with the MISSI (Monthly Integrated Survey of Selected Industries where volume of production index) of manufacturing grew more than 20 percent. This means those imported goods were really used in the production,” she said in an interview on the sidelines of an economic conference on Friday.

The Philippine Statistics Authority (PSA) on Friday reported that total imports rose by 11.4 percent to $8.54 billion, while export grew 0.5 percent to $5.22 billion.

These brought balance of trade in goods to a $3.32-billion deficit in January 2018, higher than the $2.47-billion deficit during the same month last year.

Edillon said the country imports more infrastructure-related goods as the government is working to close the infrastructure gap.

“If you are talking about bridges, airports, there are high technology components. It would be good if you import the best technology and of course best value,” she added.

Edillon said trade deficit would be only worrisome if it became “too large” and the country would have the so-called balance of payments (BOP) problem.

BOP is a summary of the economic transactions of a country with the rest of the world for a specific period.

“But the thing is, we have still very healthy international reserve position. We have many sources of foreign exchange so it is not a cause for worry,” she added.