Econ­o­mist eyes lower trade, CA deficits in 2019

Sun.Star Pampanga - - BUISNESS! - N econ­o­mist of ING Bank Manila fore­casts lower trade and cur­rent ac­count deficit for the Philippines in 2019, mainly due to pro­jec­tions of lower oil im­por­ta­tion. (PNA)

“Slightly lower than what we saw in 2018 mainly be­cause (of) the trade deficit (which is) still quite sub­stan­tial but nar­row from what we saw in 2018,” Ni­cholas Mapa, ING Bank Manila se­nior econ­o­mist said.

He, how­ever, did not give specifics.

Data from the Philip­pine Sta­tis­tics Au­thor­ity (PSA) showed that ex­ports in De­cem­ber 2018 posted a 12.3 per­cent con­trac­tion while im­ports dropped by 9.4 per­cent.

This brought the trade gap to USD3.75 bil­lion, down from year-ago’s USD2.97 bil­lion.

For the whole of 2018, im­ports grew by 13.4 per­cent while ex­ports con­tracted by 1.8 per­cent.

Im­ports have been post­ing strong ex­pan­sion given the solid growth of the Philip­pine econ­omy, with out­put lev­els of above six per­cent.

This, in turn, has re­sulted to the deficit in the coun­try’s cur­rent ac­count (CA) po­si­tion after years of be­ing in sur­plus.

Bangko Sen­tral ng Pilip­inas (BSP) data show that in the third quar­ter of last year, the coun­try posted a CA deficit amount­ing to USD2.9 bil­lion against the USD 1.1 bil­lion sur­plus same pe­riod in 2017.

This was due to the widen­ing gap in the tradein-goods to USD13.5 bil­lion from USD9.3 bil­lion a year ago.

Other con­trib­u­tors to the CA deficit are lower net re­ceipts on trade-in re­ceipts and se­condary in­come ac­counts.

In the first three quar­ters of 2018, the CA re­versed to USD6.47 bil­lion deficits from USD 968 mil­lion sur­plus as of endSeptem­ber 2017.

Mapa said that if cap­i­tal goods slide anew, after the 10.6 per­cent con­trac­tion in value, this will re­sult to “more trade deficit com­pres­sion.”

He, how­ever, fore­casts the trade gap to linger “be­cause the ex­port num­bers con­tinue to strug­gle.”

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