PH trade deficit narrows in May
Credit to Author: ANNA LEAH E. GONZALES| Date: Wed, 10 Jul 2019 16:22:23 +0000
THE country’s trade deficit decreased to $3.28 billion in May from $3.46 billion in April and $3.889 billion a year ago as exports improved and imports contracted, the Philippine Statistics Authority (PSA) reported on Wednesday.
According to the state-run statistics agency, total export sales in the month inched up by 1 percent to $6.16 billion from $6.09 billion in May 2018.
Total value of imported goods, meanwhile, slid by 5.4 percent to $9.43 billion from $9.97 billion last year.
The sales growth was attributed to increases in copper concentrates (192.1 percent); ignition wiring set and other wiring sets used in vehicles, aircrafts and ships (31.7 percent); fresh bananas (28.6 percent); chemicals (20.1 percent); metal components (14 percent); gold (8.3 percent); other mineral products (7 percent); and electronic products (6.2 percent).
The decrease in imports was blamed on the drop in major import commodities, such as iron and steel (-25.5 percent); transport equipment (-19.3 percent); mineral fuels, lubricants and related materials (17.2 percent); plastic in primary and non-primary forms (-13.7 percent); industrial machinery and equipment (-4.8 percent); and other food and live animals (-3.7 percent).
Total external trade in goods reached $15.58 billion, down 3 percent from last year’s $16.06 billion.
According to Nicholas Antonio Mapa, senior economist at ING Bank Manila, the delay in the approval of this year’s national budget continued to affect imports.
“The ill-effects of the delay in the passage of the 2019 budget, coupled with still-elevated borrowing costs hurt demand for both capital goods and raw materials. Capital goods were slightly negative while raw materials dropped 10.7 percent for the month of May,” Mapa said in a statement.
Imports of raw materials, and intermediate goods and capital goods, posted the largest contribution to the total import value in the month.
“Almost all subcomponents for intermediate materials were in the red, with iron steel and non-ferrous metals seeing double-digit dips, while imports for use in electronics exports were down 10.4 percent, Mapa said.
“ With [the] government and private sector’s plans for expansion on hold, capital goods and raw materials dragged overall imports lower,” he added.
Despite the decline, the government remains optimistic that imports and exports of goods would be better in the second half of the year.
The “global economic outlook for 2019 remains subdued as policy uncertainties and some geopolitical tensions continue to pose risks to many economies. But amid these external developments, the country’s economic outlook remains upbeat,” Socioeconomic Planning Secretary Ernesto Pernia said in a separate statement.
According to him, the approval of the Philippine Export Development Plan (PEDP) 2018-2022, which lays down crucial broad-based reforms that will improve the overall climate for export development by removing regulatory impediments, enhancing trade facilitation and fostering supply-chain linkages, should also further support external trade.
“Strategies under the PEDP must be implemented in harmony with the Philippine Development Plan 2017-2022 to boost merchandise trade growth,” Pernia said.
“The Philippines should likewise continue to aggressively pursue regional integration and cooperation to dampen the effects of increasing trade tensions,” he added.
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