Oct trade deficit widest in 26 months as exports faltered
INQUIRER FILE PHOTO
The Philippines posted its widest foreign trade deficit in 26 months in October as exports contracted for the second straight month while imports posted a faster growth.
Latest data from the Philippine Statistics Authority (PSA) showed that the country had recorded a merchandise trade gap of $5.8 billion in October, fatter by 36.8 percent compared with a year ago.
That the country continued to post a trade deficit means it spent more dollars on imports than it earned from export sales, which can put pressure on the peso. Figures showed the trade imbalance in October was the biggest since August 2022.
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Article continues after this advertisementDissecting the PSA’s report, exports fell by 5.5 percent to $6.16 billion. Sales of electronic products, the country’s top export, sagged by 23.3 percent in October to $2.87 billion, the largest decline among the commodity groups.
Article continues after this advertisementYear to date, export receipts amounted to $61.83 billion, up by just 0.4 percent.
Imports, meanwhile, grew by 11.2 percent to $11.96 billion in October on the back of heightened purchases of capital goods (+21 percent), raw materials and intermediate goods (+5.5 percent) and consumer goods (+29 percent). Inbound shipments of petroleum crude, however, fell by 33.2 percent.
This brought the 10-month import bill to $107.05 billion, marking a 1.7-percent increase.
Miguel Chanco, economist at Pantheon Macroeconomics, said the October trade gap was the second largest in history and was caused by exports hitting a big speed bump and a steady improvement in import demand.
Particularly, Chanco said the import growth could be a symptom of robust domestic activity. “The ongoing upturn in imports, while deleterious for the trade balance, is largely welcome from the standpoint of activity,” he explained.
Chinabank Research, in a commentary, said exports might continue to disappoint in the coming months due to “potentially muted demand for electronics next year.”
“Combined with rising import demand, this [weak exports] could result in wider trade deficits, which may be a drag on the country’s growth potential,” Chinabank said.
