PH trade deficit hits record high
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Tue, 11 Dec 2018 16:25:46 +0000
THE Philippines’ trade deficit hit an all-time high in October as imports continued to grow much more than exports, the Philippine Statistics Authority (PSA) reported on Tuesday.
Inbound shipments increased by 21.4 percent year-on-year to $10.320, significantly outpacing exports that expanded by just 3.3 percent to $6.108 billion.
Total trade in goods subsequently hit a deficit of $4.212 billion, the highest on record and 70 percent more than the $2.585 billion posted a year ago.
Year to date, the trade deficit widened by 68.5 percent to $33.918 billion, from $20.128 billion, as exports contracted by 1.2 percent amid 16.8-percent growth in imports.
ING Bank Manila senior economist Nicholas Antonio Mapa said the October result was an indication that the country’s current account would likely remain in the red.
“Capital imports and raw material growth are not expected to slow down in the near term as imports feed the burgeoning economy,” he noted.
“Robust import growth is yet another sign that the Philippines has moved into a new chapter in its growth story, requiring a shift in the country’s import dietary requirement,” Mapa added.
Nomura Securities Ltd. economist Euben Paracuelles estimated that the current account deficit would widen sharply to 2 percent of gross domestic product this year from 0.7 percent in 2017.
“Overall, this remains consistent with our view that still strong domestic demand which reflects more infrastructure spending will sustain a large goods trade deficit,” he said.
Paracuelles explained that slower electronics export growth and strong infrastructure-led domestic demand was a potent combination that could push the goods trade deficit wider.
He said that there would be significant offsets next year, such as a drop in oil prices, higher overseas worker remittances that tend to rise in an election year and an improvement in tourist arrivals.
The country’s 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 post PH trade deficit hits record high appeared first on The Manila Times Online.