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MANILA, Philippines—The Philippines is expected to sustain merchandise trade growth in the medium term following reforms conducive to economic recovery, the Department of Finance (DOF) said.
In an economic bulletin last Saturday (April 2), the DOF’s chief economist and former undersecretary Gil Beltran noted that despite the Omicron-induced infection spike last January that revived stricter pandemic restrictions, combined exports and imports grew 20.1 percent year-on-year to $16.8 billion. The value of imported goods at the start of this year jumped 27.5 percent to $10.7 billion, while exports rose 8.9 percent to over $6 billion.
“Additionally, total trade for the month was 13-percent larger than the total recorded in 2019. Imports and exports were 12.3-percent and 14.2-percent, respectively, larger than their 2019 levels,” Beltran said.
Pre-pandemic, total international merchandise trade in January 2019 amounted to $14.9 billion and increased to $15.4 billion in January 2020, before the COVID-19 lockdowns. In January 2021, two-way trade fell by more than 9 percent to $13.9 billion amid the prolonged pandemic.
For Beltran, “the country must continue to hedge against the risks posed by COVID-19 through a robust vaccination program and prudent reopening of the economy to sustain the recovery momentum.”
“Key structural reforms such as the recently passed amendments to the Retail Trade Liberalization Act, the Foreign Investments Act, and the Public Service Act, will play an important role in sustaining the continued recovery of economic activities,” Beltran said.
Ahead of the release of February foreign trade figures on Friday (April 8), think tanks and financial institutions projected both exports and imports growth to continue.
Last Friday (April 1), London-based think tank Capital Economics forecast exports to have grown 10 percent in February, while imports likely inched up by 2 percent.
HSBC Global Research in an April 1 report projected a bigger trade-in-goods deficit of $4.72 billion last February from January’s $4.69 billion, on the back of an estimated 30.9-percent jump in imports outpacing 9-percent exports growth.
In a report on Monday, Moody’s Analytics said it also expects a larger February trade deficit amounting to $4.9 billion.
But for Pantheon Macroeconomics chief emerging Asia economist Miguel Chanco, February’s trade deficit likely narrowed to $3.5 billion “thanks partly to a stronger Lunar New Year hit to imports.”
“The signal from South Korea’s trade data suggests that export growth leapt to 17 percent year-on-year — the strongest in six months, while import growth likely continued to cool, to 21 percent year-on-year” in February, Chanco said on Monday (April 4).
For 2022, the government targets 10-percent goods imports growth, and 6-percent expansion in merchandise exports.