Even as exports dropped in November last year, imports sustained robust growth alongside strong manufacturing activity, the government reported Tuesday.
This year, merchandise exports are projected to recover given an expected boost from the pivot to China and Russia, which are being eyed as major destinations for Philippine agricultural produce and manufactured crafts, Socioeconomic Planning Secretary Ernesto M. Pernia told reporters on the sidelines of a Philippine Statistics Authority forum.
The latest PSA data showed that exports in November dropped 7.5 percent to $4.732 billion from $5.118 billion a year ago, such that end-November exports declined by 5.2 percent to $51.361 billion from $54.168 billion in 2015.
The drop in merchandise exports in November reversed two straight months of year-on-year growth, PSA data showed. Pernia conceded that exports might drop in 2016, although narrower than the end-November decline amid expectations that shipments would have increased in December amid the holidays.
Imports, meanwhile, jumped 19.7 percent in November to $7.298 billion from $6.095 billion in the same month of the previous year. The value of imported goods from January to November rose 13.7 percent to $73.724 billion from $64.822 billion in the same nine-month period of 2015.
The increase in imports was sustained for the fourth consecutive month in November and was the fastest in six months or since June’s 15.4-percent growth, PSA data showed.
According to state planning agency National Economic and Development Authority, total merchandise trade rose by 7 percent to $12 billion in November.
“The surge in trade transactions with East Asia and the Asean boosted the performance of imports, which also signals an increase in the purchasing power of Filipinos. We expect that this further increased in December 2016,” Pernia, who is also Neda chief, said in a statement.
Pernia said they expect further trade recovery in 2017 amid improving demand from traditional markets whose economies had slowed, such as China, Japan, the European Union and the United States.
The Neda chief added that exports to China would further grow on the plans to sell more agricultural and food products to the mainland.
The Philippines was also eyeing increased trade with Russia, especially exports of herbal and natural medicine, crafts, as well as tourism services, Pernia said.
“Remember that tourism is a services export so tourism is likely to be buoyant this year with the Chinese and the Russians coming,” he added.
Also, imports would continue to be robust amid expectations of more construction activities given the Duterte administration’s infrastructure push, the country’s chief economist said.
Manufacturing, as measured by the volume of production index of the PSA’s Monthly Integrated Survey of Selected Industries, likewise jumped in November by 14.6 percent compared with 4.4 percent a year ago.
“The manufacturing sector is expected to exhibit even stronger growth in December because of increased consumer demand during the Christmas season of 2016 compared to 2015. Looking ahead, we see the sector benefitting from strong private and public investments,” Pernia said.
“Low inflation, low unemployment, and strong remittances will also continue to drive domestic demand, and will boost manufacturing in the Philippines,” the Neda chief added.