Trade gap widens in March as exports drop for 5th month

by Ian Nicolas Cigaral, Philstar.com, May 8, 2019

MANILA, Philippines — The Philippines posted a wider trade gap in March as exports continued to contract while imports grew, the country’s statistics agency reported Wednesday.

Trade deficit in March stood at $3.14 billion, larger than the $2.34-billion gap in the comparable period last year and the $2.74-billion shortfall in the previous month.

Total export sales in March hit $5.88 billion, down 2.5% from $6.02 billion a year ago.

On the other hand, imports grew 7.8% to $9.01 billion in March from $8.36 billion in the same month in 2018.

Among major trading partners, exports to the US contracted 3.1% in March while outbound shipments to Japan, Hong Kong, China and Singapore dropped 1.2%, 6%, 2.2% and 11.6%, respectively.

Imports from China reach $1.92 billion in March

Meanwhile, imports from China—the Philippines’ biggest supplier of imported goods with 21.4% share to total bills—reached $1.92 billion in March, up 50.2% year-on-year from $1.28 billion.

“To drive up exports, we are encouraging exporters to continue to diversify products to expand their markets,” Socioeconomic Planning Secretary Ernesto Pernia said.

“To match this effort, the government continues to explore non-traditional markets such as Eastern European countries and is seeking to strengthen ties with traditional trading partners,” Pernia added.

The trade gap in the Philippines has been yawning since 2017 amid a rise in imports to feed the Duterte administration’s ambitious infrastructure program, reversing the nation’s current account surplus to a deficit and pressuring the peso.

The country’s economic managers have repeatedly said high imports would “support domestic economic expansion.” They also said several episodes of peso depreciation would give the export sector a boost. —