MANILA -The Philippines’ trade deficit shrank in September after exports reversed the preceding month’s growth while imports stayed in the negative territory for the eighth consecutive month.
The Philippines recorded a trade deficit of $3.51 billion in September, 27.3 percent smaller compared with a year ago, the Philippine Statistics Authority reported on Tuesday. The figure was also narrower compared to the $4.13-billion gap posted in August.
A trade deficit happens when a country pays more for its imports than it is earning from exporting goods.
Data showed exports contracted 6.3 percent year-on-year in September, a turnaround from the 4.2-percent expansion seen in August. Sales of electronic products, the Philippines’ top export product, posted the sharpest annual decline among the commodities to $4.09 billion, from $4.51 billion previously.
So far this year, total export earnings amounted to $54.54 billion, down 6.6 percent compared with a year ago.
Imports, however, fell by a bigger 14.7 percent year-on-year to $10.24 billion in September. This was worse than the 13 percent contraction registered in August, sustaining a losing streak that started in February this year.
The latest figure brought the country’s nine-month import bill to $94.36 billion, dropping by 10.2 percent from the comparable period last year.
Overall, the Philippines’ total external trade amounted to $16.97 billion in September, down 11.6 percent on an annual basis. Domini Velasquez, chief economist at China Banking Corp., said a weak trade activity could create some problems for the local economy.
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“2023 will likely close with a narrower trade deficit compared to last year; and this should provide some support to the Philippine peso,” Velasquez said.
“However, the lackluster performance of both exports and imports will take a toll on the country’s economic outlook,” she added. “Weak imports of capital goods point to a fragile weaker industry performance in the long run.”