Trade deficit widens to $2.79 B in February due to strong imports

The country’s trade deficit widened anew in February as imports continue to outpace exports, data from the Philippine Statistics Authority (PSA) showed.

Based on the PSA report released yesterday, the trade shortfall reached $2.79 billion in February, up by 10 percent compared with$2.54 billion in the same period last year.

Despite the widening trade gap, Socioeconomic Planning Undersecretary Adoracion M. Navarro said the government remains firm in improving the country’s relations with trading partners to weather headwinds in the global export market.

“In its effort to strengthen bilateral economic relations, the Department of Trade and Industry recently concluded dialogues with the UK, Hungary, and Czech Republic,” Navarro said.

The Philippines also signed a memorandum of understanding with Indonesia that could open up its market to Philippine agricultural produce, particularly bananas and coconut-based products.

The official added that more exports of agricultural products to Eastern Europe are also underway following the export promotion mission conducted by the Department of Agriculture and private sector representatives in Belarus.

“For the recovery in exports performance, facilitating easier movement of goods is crucial,” Navarro said.

During the month, the total merchandise trade grew by 1.2 percent year-on-year to $13.1 billion.

According to Navarro, the growth in merchandise trade was driven mainly by imports which grew by 2.6 percent to $8 billion, but tempered by the 0.9 percent decline in exports to $5.2 billion.

Fresh bananas was the top export of the Philippines, accounting for 54.6 percent of shipments, while transport equipment was the top import, accounting for 30 percent.

The US was the top export market, accounting for 17.4 percent of the total bill, followed by Japan and China, PSA data showed.

The Bureau of Customs earlier issued a memorandum order temporarily banning importers, truckers, brokers and other port stakeholders from returning empty containers to ports, except those covered by a special permit.

Moreover, a joint administrative order is expected to be released this month, which will institutionalize measures to address concerns over high shipping fees and congestion in the Port of Manila and Manila International Container Port.

“While these are positive developments, further actions such as the optimization of the use of the country’s other major ports in Batangas and Subic, and streamlining the BOC’s processes are still necessary,” she said.