Nov trade gap hits record high

THE Philippines’ trade gap reached a record high of $4.70 billion in November 2021, according to preliminary official data released on Tuesday.

The Philippine Statistics Authority (PSA) data showed imports grew 38.8 percent year on year to $10.97 billion while exports increased 2 percent to $6.27 billion.

As a result, the November trade deficit was $4.70 billion, the highest since records began. It also surpassed the previous high of $4.27 billion posted in January 2019.

The trade shortfall also picked up by 71.2 percent to $37.92 billion in the first 11 months of 2021, compared to $22.14 billion in January to November 2020.

“The annual increment of imported goods in November 2021 was due to the increase of all the top 10 major commodity groups which was led by medicinal and pharmaceutical products with a 231.1 percent annual increase,” the PSA explained.

Imports of mineral fuels, lubricants and related materials soared by 141.2 percent, followed by cereals and cereal preparations, with a 132.4-percent uptick.

The total import value from January to November 2021 was $106.30 billion, up 30.4 percent from $81.51 billion in the same period of 2020.

“Of the top 10 major commodity groups in terms of the value of exports, six recorded annual increases led by coconut oil (95 percent). This was followed by electronic equipment and parts (33.9 percent) and chemicals (31.8 percent),” the PSA, in the meantime, emphasized.

From January through November of last year, overall export revenues reached $68.37 billion, a 15.2 percent acceleration over the same period in 2020.

In a statement, ING Bank Manila senior economist Nicholas Antonio Mapa said that while imports soared across the board, higher fuel imports were a major factor in the trade gap widening.

“Costlier imported crude oil translated to overall fuel imports rising sharply which, in turn, helped bloat the trade deficit to its current record high,” he highlighted. “With global crude oil prices staying elevated to open the year, the Philippines could continue to experience wider trade deficits in the near term,” he added.

Meanwhile, Rizal Commercial

policy.”

Wall Street was in the red overnight as the Dow Jones and S&P 500 lost 0.45 percent and 0.14 percent, respectively, while Nasdaq inched up by 0.05 percent.

Onshore, trading was stronger as net value turnover stood at P6.59 billion, better than Monday’s P5 billion but still slower than the P7.38 billion daily average last year.

Despite this, he said Deutsche Bank projects consumption to pick up in the first half of this year at around the same rate as the previous three quarters of 2021, which allows for a tightening of restrictions followed by a rebound as restrictions are relaxed.

Spencer added the bank sees consumption to expand at a somewhat quicker rate in the second half of this year and into next year, before reverting to trend growth in

Banking Corp. (RCBC) chief economist Michael Ricafort said the country’s trade deficit in November 2021 was largely due to the weak peso exchange rate against the US dollar in recent months.

It’s also owing to a new monthly record high in imports amid steps to further open the economy to greater normalcy during the month, he added, while export value dropped to six-month lows but remained near pre-pandemic highs.

Increased foreign direct investments and infrastructure spending, particularly in the run-up to the May 2022 elections, according to Ricafort, could have sped up import

Foreign funds extended their exodus as net outflows amounted to P733.34 million.

All the local sectors ended with losses led by the miners at 1.37 percent.

Total volume turnover was 877.97 million shares valued P6.91 billion.

Decliners outpaced advancers at 105 to 82 while 43 securities were unchanged. at at

the second half of 2023.

“We think there is a stronger ‘pent-up demand’ story to be told about investment, which plunged much more than consumption or goods exports in 2020 and has much further to go to recover fully,” he further said.

HSBC and Deutsche Bank’s growth expectations for 2022 fell short of the interagency development Budget Coordination Committee’s target of 7 to 9 percent. growth and widened the trade deficit in recent months.

However, he added that the recent spike in Covid-19 cases locally and globally, owing in part to the more transmissible Omicron variant, which has resulted in some movement limitations, could be a drag on economic recovery prospects as well as export and imports.

“Trade deficit could sustain at the $4 billion levels per month for as long as global oil/commodity prices remain elevated amid continued disruptions in the global supply chains that could be aggravated by the more transmissible Omicron variant,” the RCBC economist said.