English
Philippines: Trade stood resilient amid lockdowns, Omicron variant surge in January
MANILA, Philippines — Foreign trade sustained its nascent climb in January, with both exports and imports inching up despite stringent curbs back then.
What’s new
External trade expanded 20.1% year-on-year to $16.78 billion in January, the Philippine Statistics Authority reported Friday. This was slower than the 25.9% annual growth rate in December last year, and a turnaround from the 9% contraction posted a year ago.
Data showed exports sustained their momentum, inching up 8.9% year-on-year to $6.04 billion in January, marking its 11th straight month of growth. Imports rose as well at a slower annualized rate of 27.5% to $10.74 billion in January.
Likewise, the Philippines’ trade deficit, which occurs when imports bill exceed export sales, amounted to $4.7 billion in January, 3.75% smaller than the previous month. But on an annual basis, the trade gap widened 63.2%.
Why this matters
Trade on the mend is a welcome development as the country looks to bounce back from a historic economic meltdown induced by the pandemic.
By all accounts, trade regained much of its pre-pandemic vigor last year as it finished 2021 with better figures.
What analyst says
For Nicholas Antonio Mapa, senior economist of ING Bank in Manila, pricey oil could prove to be a snag in the coming months. Local pump prices have risen in reaction to global crude oil prices that breached the $100 per barrel mark in past weeks when Russia started invading its neighbor Ukraine.
“In the coming months, we can expect the trade gap to yawn further especially with the oil import sector forecast to bloat due to expensive crude oil. The oil import bill could swell from $1.4 billion to $2.1 billion due to pricier global crude, causing the overall trade deficit to deteriorate further,” he said in an emailed commentary.
Mapa explained that a larger trade deficit could spell gloom for the weakening peso. The peso hit P52 against the greenback this week, sinking to its lowest since September 2019.
“A wider trade gap spells depreciation for the peso which is down 2.4% for the year. More expensive energy and a weaker currency will likely feed through to faster inflation in the near term despite the central bank’s expectation that inflation will remain target for the year,” Mapa added.
Other figures
- Sales of electronic products, the country’s top exports, amounted to $3.51 billion in January, up 8.2% year-on-year.
- Medicinal and pharmaceutical products, which grew 240.9% year-on-year in January, were the main driver of growth in total imports bill during the month.
Source: https://www.philstar.com/business/2022/03/11/2166562/trade-stood-resilient-amid-lockdowns-omicron-variant-surge-january