The trade-in-goods deficit further widened to $22.49 billion at the end of the first seven months as the sustained jump in imports outpaced exports recovery in July.
Socioeconomic Planning Secretary Ernesto M. Pernia told the Inquirer that even as the balance of trade in goods stayed at a deficit and breached the $20-billion mark as of July, the level was “still manageable enough.”
“In fact, the current account deficit is only about 0.8 percent of gross domestic product—one of the lowest among emerging markets. So [the trade deficit remained] comfortable and manageable,” added Pernia, who heads the state planning agency National Economic and Development Authority.
Imports from January to July climbed 15.7 percent to $61.23 billion from $52.92 billion a year ago, the latest preliminary Philippine Statistics Authority data released Tuesday showed.
In July alone, the value of imported goods that entered the country surged 31.6 percent year-on-year to $9.4 billion.
On the other hand, end-July merchandise exports declined 2.8 percent to $38.74 billion from $39.87 billion last year.
The seven-month exports figure remained lower year-on-year even as shipments of Philippine-made goods abroad inched up 0.3 percent in July to $5.85 billion.
As such, the trade-in-goods deficit during the month of July almost tripled to $3.55 billion from $1.3 billion a year ago.
The end-July goods trade deficit was 72.3-percent bigger than the $13.06 billion posted last year.
The prevailing trade deficit resulted in a current-account deficit as more dollars were being spent for importation.
Market concerns on the current-account deficit weakened the peso to nearly 13-year lows.
In turn, the weak domestic currency also put pressure on the prices of basic commodities such that inflation surged to its highest in more than nine years this year.
Prices of food, especially rice, fish, meat and vegetables, rose further in August, pushing inflation nationwide to 6.4 percent year-on-year, a nine-year high and prompting many consumers to find various ways to scrimp—from carpooling and bringing packed lunches to even forgoing dates on weekends.
Inflation was higher in Metro Manila at 7 percent, while price increases outside the metropolis averaged 6.2 percent, according to the Philippine Statistics Authority (PSA).
Economic managers said that as the Duterte administration embarked on its ambitious “Build, Build, Build” infrastructure program alongside expectations of robust economic growth, demand for imports of mostly capital goods would remain strong in the near term.
Last year, amid a surge in imports that resulted in a record-high trade-in-goods deficit of $29.8 billion, the current account deficit ballooned to $2.5 billion, the biggest since 1999.