Double-digit export growth narrowed trade gap in October
A surge in export growth and a slip in imports pushed the country’s trade deficit to shrink by more than a third in October, the Philippine Statistics Authority (PSA) reported on Friday.
PSA data showed that the country’s trade-in-goods deficit, or the difference between exports and imports, narrowed by 34.2 percent year-on-year to $3.83 billion from $5.81 billion in the same month last year.
This is also narrower than last month’s $4.35 billion gap.
Driving the narrower gap was a 19.4-percent jump in exports to $7.39 billion, up from $6.19 billion a year earlier.
The strong export growth was due to robust electronics exports, which recorded total earnings of $4.18 billion or more than half of the country’s total exports.
Similar to last month, the United States remained the top export market after accounting for $1.16 billion or 15.7 percent of total exports.
According to economists at Chinabank, further jumps in exports are to be expected after the US exempted approximately 46 percent of Philippine exports from tariffs on Nov. 14.
“With the US recently exempting more Philippine goods from the 19 percent reciprocal tariff, this development could help sustain the Philippines’ export momentum and further narrow the trade deficit,” Chinabank said.
Chinabank added that electronics exports might see more increases next year on the back of demand for new technologies such as artificial intelligence.
Meanwhile, Trade Secretary Cristina Roque said they had been “aggressive” in maintaining export growth.
“We’re still hoping that the growth will be sustained. We’re very aggressive. We’ve been really pushing for exports and really strengthening the business sector,” she said.
Imports
Imports, meanwhile, contracted 6.5 percent to $11.22 billion from $12.01 billion last year. Still, it remained below last month’s $11.6 billion.
Electronics also dominated the import market after bringing in $2.97 billion or 26.5 percent of the total imports. But this is lower than last month’s $3.05 billion.
China remained the largest supplier of the country’s imported goods after recording $3.41 billion or 30.4 percent of the total in October.
According to Michael Ricafort, chief economist at Rizal Commercial Banking Corp., the slowdown in imports may be partly due to the recent weakening of the peso against the US dollar.
“The relatively weaker peso made imports more expensive for local buyers, which dragged down demand,” he said.
Still, Ricafort said import growth could pick up as export-oriented countries diversify and sell more products to the Philippines.
