JAN. TRADE GAP WITH CHINA A THIRD OF TOTAL

THE country started the year incurring a trade deficit of $3.76 billion, with China registering a trade surplus of $1.36 billion with the Philippines in January, according to official government data released on Tuesday.

Data from the Philippine Statistics Authority (PSA) showed that in January, imports from China amounted to $2 billion, while exports only reached $640.79 million.

The trade deficit with Beijing accounted for a third of the total trade deficit of Manila in January. The total trade deficit of the Philippines during the period was the largest since October 2018, when the deficit was at $4.08 billion.

Apart from China, the Philippines also had its largest trade deficits with South Korea and its Asean peers, namely Indonesia, Thailand and Vietnam.

South Korea has a trade surplus with the Philippines worth $584.13 million followed by Indonesia with $438.76 million; Thailand, $360.73 million; and Vietnam, $267.43 million.

Imports from South Korea reached $789.56 million while exports only amounted to $205.43 million; imports from Indonesia, $502.46 million and exports of $63.7 million; imports from Thailand, $602.67 million and exports of $241.93 million; and imports from Vietnam, $356.86 million and exports of $89.43 million.

Among its major trade partners, the Philippines only has a trade surplus with four economies led by Hong Kong, China, at $338.58 million; United States, $183.19 million; the Netherlands, $149.67 million; and Japan, $95.95 million.

With this, the country’s trade deficit was the largest in East Asia at $1.769 billion followed closely by the Asean at $1.402 billion. The country also has a $7.61-million trade deficit with the European Union.

However, the National Economic and Development Authority (Neda) said hope springs eternal for the Philippines as certain developments, most notably the conclusion of the Regional Comprehensive Economic Partnership (RCEP) agreement this year, will help the country boost its exports and narrow its trade deficit.

Neda said the RCEP aims to achieve greater market access for goods, services and investments, and provide businessfriendly and trade-facilitative rules for businesses and investors among its 16 member-economies.

“The RCEP would significantly benefit exporters considering that its membereconomies—which include Asean countries, Australia, China, India, Japan, Korea and New Zealand—constitute a third of global output and more than a quarter of the world’s population,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

Data released by the PSA showed the country’s total merchandise trade grew by 2.9 percent, reaching $14.3 billion in January 2019. However, the trade deficit also grew 18.75 percent to $3.756 billion in 2019, from $3.163 billion in January 2018.

January’s trade performance is largely due to a rebound in imports, which grew by 5.8 percent to $9.035 billion, from $8.536 billion in January 2018.

Neda said this growth was supported by increases in the import values of consumer goods, capital goods and raw materials and intermediate goods.

Exports, meanwhile, recorded a 1.7-percent contraction to $5.279 billion in January 2019, from $5.373 billion in 2018. Neda said the decline was due to lower receipts from manufactures and minerals which offset the gains in exports of forest and total agro-based products.

“The Department of Agriculture is currently in talks with Singapore, Russia and Monaco for possible arrangements to increase Philippine agricultural export products to these countries,” Pernia said.

Pernia also said exporters are strongly encouraged to explore opportunities in emerging sectors and to respond to increasing market demand for other nontraditional exports to broaden exports base.

Meanwhile, imports growth is still seen to be constrained by the delayed approval of the 2019 national budget and the election-spending ban.

Nonetheless, the economic team has formally requested the Commission on Elections to exempt at least 145 priority infrastructure projects from the election ban to minimize delays while mitigating its effects on economic growth.

The Comelec has yet to decide on the request of the Neda, the Department of Finance and the Department of Budget and Management. The fate of these projects continues to hang in the balance.

“The importation of raw materials is likely to be affected by the holdback in the implementation of numerous projects under government’s ‘Build, Build, Build’ program,” Pernia said.