Trade gap up slightly in 2017

The Philippines incurred a slightly higher trade deficit in 2017 as the growth in imports still outpaced exports, the country’s data agency said.

In a report released yesterday, the Philippine Statistics Authority (PSA) said total merchandise trade rose 9.9 percent to $155.534 billion, with both exports and imports growing faster than government estimates.

Imports grew 10.2 percent to $92.660 billion last year from $84.108 billion in 2016. Exports, meanwhile, went up 9.5 percent to $62.874 billion from $57.406 billion in 2016.

This brought the trade deficit in 2017 to $29.786 billion, a mere 0.2 percent rise from $29.702 billion in 2016.

In December alone, exports dropped 4.9 percent to $4.72 billion – the first decline in 12 months – while imports increased 17.6 percent to $8.74 billion.

This also resulted in a deficit of $4.02 billion in the balance of trade in goods during the month, up 62.75 percent from the $2.47 billion deficit in December 2016.

Increased outbound shipments of the following commodities were seen in December: cathodes and sections of cathodes, gold, machinery and transport equipment, electronic equipment and parts, electronic products and miscellaneous manufactured articles.

Lesser exports of the following commodities, on the other hand, were registered during the reference period: coconut oil, ignition wiring sets, metal components, and other manufactured goods.

Higher imports of the following commodities, meanwhile, were seen in December: mineral fuels and lubricants, miscellaneous manufactured articles, electronic products, telecommunication equipment, iron and steel, metalliferous ores and metal scrap, transport equipment, plastics in primary and non-primary forms, industrial machinery and equipment.

The National Economic and Development Authority (NEDA) said the government should continue to implement strategies that would heighten demand for Philippine-made products to sustain merchandise trade growth.

“We need to effectively respond to market trends and consumer preferences worldwide to drive more demand for Philippine-made products,” said Socioeconomic Planning Secretary and NEDA chief Ernesto Pernia.

This can be done by gathering timely and relevant information on emerging demands in potential markets through the help of diplomatic posts and trade attachés, he said.

Intensified market research and tighter linkages with businesses, malls and shopping centers abroad would also help increase the visibility of Philippine export products.

“To drive exports growth, we are also looking at maximizing trade agreements with countries in the region,” Pernia said.

He noted that export volumes may increase especially for banana, coconut, and other agricultural produce by negotiating tariff structures and implementing free trade agreements to bring down tariffs levied on Philippine agricultural exports in major export markets.