PH trade gap likely wider in Oct – HSBC
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 10 Dec 2018 16:22:02 +0000
The country’s trade deficit likely expanded in October, banking giant HSBC said ahead of today’s release of official data.
“We expect the Philippine trade deficit to widen further in October, driven by a continued slowdown in exports alongside elevated imports of capital goods and raw materials,” it noted in a report.
HSBC forecast an October trade gap of $3.950 billion, wider than the prior month’s $3.927 billion and the $1.752 billion posted a year ago.
Official October data is scheduled to be released today by the Philippine Statistics Authority.
HSBC said inbound shipments likely rose by 15.3 percent year-on-year amid a 1.0-percent contraction in exports.
“Exports have been dragged by softer shipments of light manufactures and machinery this year,” it pointed out.
HSBC also said that “this year and next are likely to be the most import-intensive phases of infrastructure build-out, which means a further increase of the country’s current account deficit.”
The current account—a major component of the balance of payments—hit a deficit of $3.087 billion in the first half of 2018, equivalent to 1.9 percent of gross domestic product.
The National Economic and Development Authority has said that import payments will remain elevated until 2019, primarily due to purchases of capital goods and raw materials to sustain the government’s “Build Build Build” program.
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