MANILA -The Philippines’ trade deficit widened in January by almost a third, as exports fell by more than a tenth amid a gloomy growth outlook for the year.
Preliminary data from the Philippine Statistics Authority (PSA) said the deficit reached $5.74 billion, expanding 27.2 percent from the $4.5 billion in the same month of last year.
The Philippines came from a year when it saw its trade deficit widen by 38 percent to $58.3 billion in 2022, as imports during that year showed signs of recovery from market disruptions caused by the global outbreak of the COVID-19 pandemic in 2020.
The PSA said the country’s total exports slid by 13.5 percent to $5.23 billion—the lowest since dropping to $4.54 billion in May of 2020, when the pandemic struck.
Sought for comment, Michael Ricafort, chief economist of Rizal Commercial Banking Corp., told the Inquirer that the wider trade deficit in January was largely due to the increase in the importation of oil and petroleum, capital equipment, transportation equipment, telco equipment, iron and steel, and plastics, as the economy reopened toward greater normalcy with no more restrictions.
“For the coming months, the recent easing of global oil and other commodity prices amid risk of US economic slowdown or recession would somewhat be a challenge and risk for exports, but could still help ease the country’s imports of oil and other major global commodities,” said the RCBC executive.
Asked whether the banking crisis in the United States, the Philippines’ leading export market, could impact the country, Ricafort had this to say: “This could also slow down, weigh on the markets and the economy, thereby could be a potential drag on exports, on top of risk of US recession.”
Nicholas Mapa, ING Bank senior economist in the Philippines, said that soft demand can be expected from the United States and Europe as a general outlook this year.
—Alden M. Monzon INQ
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