Trade deficit narrows 5.4% in Sept – PSA

The country’s trade deficit narrowed by 5.4 percent in September as exports growth outpaced imports for the 10th consecutive month, the Philippine Statistics Authority (PDA) reported yesterday.

PSA said total merchandise trade grew 2.8 percent to $13.10 billion in September from $12.74 billion registered in the same month last year.

Exports rose 4.3 percent to $5.59 billion in September from $5.36 billion the previous year, boosted by increased outbound shipments of gold, coconut oil, machinery and transport equipment, metal components, other manufactured goods and electronic products.

Imports, meanwhile, grew modestly by 1.7 percent to $7.51 billion in September from $7.38 billion last year on increased inbound shipments of capital goods such as mineral fuels, lubricants and related materials, iron and steel, telecommunications equipment and electrical machinery, as well as cereals and cereal preparations.

With higher imports, the country’s total balance of trade remained in a deficit, but narrower at $1.91 billion in September 2017 compared with $2.02 billion in September 2016.

National Economic and Development Authority (NEDA) Undersecretary Rosemarie Edillon said exports were boosted by increased demand in major economies such as the Eurozone, US and China as economic recovery sets in.

“The third quarter growth performance of several major economies such as the Eurozone, US and China reflects an upbeat outlook for the global economy. Given this, we are optimistic that Philippine trade will pick up in the last quarter due to higher demand in the holiday season,” she said.

The US was the top destination of Philippine exports in September, with total export revenues totalling $802.59 million, comprising 14.3 percent share of the total exports for September 2017. This was higher by 4.9 percent from $764.84 million recorded in September 2016.

Other top export destinations during the reference period were Hong Kong, Japan, China, Singapore, Germany, Netherlands, Thailand, Korea and Portugal.

For imports, inbound shipments came mostly from South Korea, Indonesia, Taiwan and Vietnam. Increased sourcing from these countries offset the lower inward shipment from China, Japan and US during the reference period.

Edillon expressed support for regional cooperation initiatives reducing trade costs and lowering barriers that would be taken up during the upcoming Asia Pacific Economic Cooperation (APEC) and Association of Southeast Asian Nations (ASEAN) meetings.

“We look forward to regional cooperation and integration being forwarded in APEC 2017 Vietnam and also in the upcoming 31st ASEAN meetings. We expect these initiatives to promote inter- and intra-regional trade and deepen engagement between regional blocs, as spelled out in the Philippine Development Plan 2017-2022,” she said.

She noted that the call being made in APEC to establish a free-trade area in Asia and the Pacific would enhance trade and investment flows in the region and deepen ties among APEC member economies.

The ASEAN Business Advisory Council has also urged the fast tracking of non-tariff measures, non-tariff barriers, and the ASEAN Single Window initiative to further improve the ease of doing business in the region.