Philippines posts biggest trade deficit in 5 months

MANILA – The Philippines posted its widest trade deficit in five months for January as exports fell sharply, pointing to a worsening trade balance that could put pressure on the peso in the near term.

The trade gap in January widened by 27.2 percent to $5.74 billion, the biggest since the record monthly deficit of $6 billion in August, from $4.5 billion in the same month last year, preliminary data from the Philippine Statistics Authority showed on Tuesday.

Exports saw the steepest decline in nearly three years, down 13.5 percent to $5.2 billion from a year earlier, while imports grew 3.9 percent to $11 billion from the same period in 2022.

It was the first monthly rise for imports in three months.

The January trade gap was worse than the deficit of around $4.3 billion that ING had projected.

For the full-year 2022, the country’s trade deficit increased by 38 percent to $58.3 billion from year-ago level, as imports showed signs of recovery from market disruptions caused by the global outbreak of COVID-19 in 2020.

“The persistent trade deficit in the Philippines points to depreciation pressure for…the Philippine peso in the near term,” ING senior economist Nicholas Mapa said.

The peso has fallen more than 2 percent since hitting 53.65 per U.S. dollar on Feb. 3, which was the strongest close so far this year. It was at 55.03, as of 0216 GMT.

-with a report from Alden M. Monzon, INQ

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PH trade deficit widened by 38% in 2022 to $58.3B