The volume of the Philippines’ merchandise exports inched up in 2019 while imports declined partly as a result of late budget approval that slowed importation of capital equipment for government-led projects, the country’s chief economist said on Tuesday (Feb. 11).
The latest initial Philippine Statistics Authority (PSA) data also showed that China was the Philippines’ top source of imported goods and third-biggest export destination.
The value of products imported by the Philippines from China in 2019 hit $24.5 billion, up 11.5 percent from 2018 and accounted for 22.9 percent of last year’s total imports.
The amount of Philippine-made goods sold to China in 2019, meanwhile, reached $9.6 billion, up 9.2 percent and equivalent to 13.7 percent of total.
Only exports to the United States and Japan exceeded the value of shipments to China.
The PSA separates Philippine trade figures with mainland China and Hong Kong—if combined, total 2019 exports to China will increase to $19.3 billion, bigger than $11.5 billion to the US and $10.6 billion to Japan.
Total imports from China and Hong Kong, meanwhile, will rise to $28 billion.
Socioeconomic Planning Secretary Ernesto M. Pernia told the Inquirer that the spread of novel coronavirus (nCoV) may have both positive and negative impact on the Philippines’ trade with China.
On the plus side, Pernia said: “China would likely want to ramp up their exports among measures to prop up the economy. If so, our imports from them would continue.”
As for exports to China, Pernia said “we clearly need to aggressively look for other destination countries—in effect, widen the array of our trade partners, and vigorously boost our export drive besides diversifying our products.”
Pernia, who heads the state planning agency National Economic and Development (Neda), said diversification would also apply to the tourism sector, as China had been the Philippines’ second-largest source of inbound visitors, next only to South Korea.
The Philippines’ total two-way external trade-in-goods, or merchandise exports and imports combined, in 2019 declined 2.4 percent to $177.7 billion from $182.1 billion in 2018.
Exports in 2019 rose 1.5 percent to $70.3 billion from 2018’s $69.3 billion.
On the other hand, imports declined 4.8 percent to $107.3 billion last year from $112.8 billion in 2018, reversing the 17.4-percent jump in the previous year.
Pernia said in a separate interview with reporters that the drop in total trade—mainly caused by a faster decline in imports last year—was caused by the delayed approval of the P3.7-trillion 2019 national budget, which led to government underspending of P1 billion per day from January to April.
Pernia added that the import volume drop last year may also be a result of excess inventory from previous years.