PH Trade Gap Narrows In October

Philippine Statistics Authority (PSA) said the Philippines’ trade gap narrowed in October ex exports rose while imports grew slower.

PSA released the data showing the balance of trade in goods or the difference between the value of the country’s exports and imports amounted to a $3.31 billion deficit in October, lower than the $3.82 billion in the same month last year.

Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said the smaller trade deficit in October  was “largely brought about by the new record high for exports on a monthly basis.”

The country’s exports grew at a faster pace in September due to the following major commodity exports: electronic products (39.6%); ignition wiring sets and other wiring sets used in vehicles, aircraft, and ships (26.1%); and machinery and transport equipment (1.9%).

Ricafort said disruptions in the global supply chains may have provided opportunities for increased demand for some Philippine exports.

Meanwhile, imported goods in the country rose to 7.5% in October but grew slower. PSA said growth in imports was mainly because of five major commodity groups: metalliferous ores and metal scrap (462.7%); transport equipment (46.3%); other food and live animals (40.3%); mineral fuels, lubricant and related materials (29.7%) and miscellaneous manufactured articles (10.2%).

“Imports could have been partly slowed by higher prices or inflation, still relatively weaker peso earlier in recent months that increased importation costs or prices, as well as higher interest rates (higher borrowing costs or financing costs) locally and worldwide, in terms of higher input costs or prices,” Ricafort said.

The Philippines’ total external trade in goods reached $18.7 billion in October, up 12.3% higher than the $16.65 billion in the same month last year.

From January to October, the country’s trade deficit reached $49.98 billion, higher than the $32.4 billion last year.

Ricafort said the full-year trade gap could reach around $60 billion, with the monthly average trade deficit amounting to $5 billion in the first ten months of 2022.

The country’s total export earnings amounted to $66.01 billion, up 6.3% from $62.10 billion last year.

Imported goods by the Philippines rose to 22.7%  to $116 billion.

Source: The Philippine Star