Persistent export weakness widened trade gap in November

The Philippines’ trade deficit widened in November 2023 after imports posted a measly growth while exports stayed in the negative territory amid weak demand abroad.

The trade gap bloated 26.3 percent year-on-year to $4.69 billion in November, the Philippine Statistics Authority reported on Wednesday.

The latest reading was also larger than the $4.39 billion shortfall recorded in October.

A trade deficit happens when the country’s import bill is larger than its export sales.

Data showed exports collapsed for the third consecutive month in November 2023 to $6.13 billion, down by 13.7 percent. Sales of electronic products, the Philippines’ top export product, sagged 24.6 percent while demand from the US, a major trading partner, fell by 14.5 percent.

Meanwhile, imports returned to growth mode after nine straight months of contraction, but they inched up by a mere 0.02 percent to $10.82 billion.

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Capital goods

Inbound shipments of capital goods (+0.1 percent) and consumer goods (+15.4 percent) posted positive growth in November, offsetting the decline in purchases of raw materials (-3.8 percent), mineral fuels (-7.8 percent).

“Even with the slightly better imports growth, the culprit was the sustained export weakness that further widened the Nov trade deficit,” Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines, said. —Ian Nicolas P. Cigaral INQ