Trade deficit widens 32% in March

The country’s trade gap widened 31.8 percent in March as growth in imports continue to outpace exports due to increased inbound shipments of raw materials and capital goods, the Philippine Statistics Authority (PSA) reported yesterday.

The balance of trade in goods registered a deficit of $2.303 billion, higher than the $1.747 billion deficit in the same period last year.

Imports amounted to $7.882 billion during the reference period, up 24 percent from $6.358 billion in the same period last year. This was attributed to increased inbound shipment of raw materials, capital goods and consumer goods.

Export sales, on the other hand, amounted to $5.579 billion in March, up 21 percent from $4.611 billion in the same period last year. Outbound shipments of electronic products – still the country’s top export commodity – rose 19 percent in March.

Other export products that registered growth during the month were coconut oil, gold, other mineral products; machinery and transport equipment; metal components; chemicals; ignition wiring sets and other wiring sets used in vehicle, aircraft and ships.

In terms of market destinations, exports have been supported by the sharp increase in receipts from Hong Kong (38.9 percent) China (38.9 percent), South Korea (7.3 percent), Taiwan (17.5 percent), US (20.4 percent) and EU (56.2 percent).

This brings the first quarter growth of imports to 18.6 percent and exports to 18.3 percent, said the National Economic and Development Authority (NEDA).

NEDA said Philippine trade growth during the month outpaced those of Indonesia (20.9 percent); Malaysia (20.4 percent); Vietnam (20.2 percent) and Thailand (13.8 percent).

“These figures support our view that the Philippines will be the fastest-growing economy among the ASEAN-5 this year,” said NEDA Undersecretary Rolando Tungpalan.

“We aim to follow through by forging stronger connections with our ASEAN neighbors as merchandise trade with them comprises a substantial share of 21.9 percent of out country’s total trade in the first quarter,” he added.

He also expressed confidence that the momentum would be sustained in the coming months because of recovering external demand, strong domestic consumption and investment activities.

To fully take advantage of the region’s growth, small and medium enterprises must be integrated in global value chains, said Tungpalan.