MANILA – The Philippine trade deficit widened by more than 130 percent in April as imports registered a double-digit growth while exports declined, data released by the Philippine Statistics Authority (PSA) showed.
The country’s balance of trade in goods expanded to a $3.615-billion deficit, up 132.6 percent from $1.554 billion in April 2017.
A deficit indicates that the value of the country’s imports exceeded exports.
Exports declined by 8.5 percent to $5.11 billion from $5.59 billion, the fourth straight month of declines.
Imports increased by 22.2 percent to $8.73 billion from $7.14 billion, helped shipments of capital goods, raw materials and intermediate goods, consumer goods, and mineral fuels and lubricants.
“The widening of the country’s deficit can be attributed to strong investment spending, which is driving imports higher. The surge in imports is not surprising given the government’s ‘Build Build Build’ program,” Guian Angelo Dumalagan, market economist at Land Bank of the Philippines, told GMA News Online.
“Weather disturbances likely contributed to the decline in outbound shipments by disrupting agricultural production,” Dumalagan said.
The country’s total merchandise trade grew by 8.8 percent, a reversal from the 2.7- percent decline in March.
“The current turnout of imports is encouraging. But much has to be done to create an environment that is necessary for exporters to thrive. The signing into law of the Ease of Doing Business Act of 2018 is a step in the right direction,” Socioeconomic Planning secretary Ernesto Pernia said in a separate statement.
Pernia said the new law could bring down business costs, encourage wider participation among firms, and attract foreign investors – eventually boosting exports in the near to medium-term.
“Seizing the benefits of existing free trade agreements (FTAs) and forging new ties are equally important to expand the market for exports,” the Cabinet official said.
“Enhancing trade relations with the country’s non-traditional partners would also contribute highly to the growth of the exports sector,” he said.
The balance of trade is likely to remain in deficit amid expectations of higher imports of capital goods, Dumalagan noted.
“This has the effect of keeping the peso weak. While a higher trade deficit subtracts some points from gross domestic product growth, it is not totally bad for the economy, as an investment-led increase in imports could set the stage for stronger economic growth in the future,” he said. (GMA News)
