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Philippines: Trade deficit narrows by 41% in December
MANILA, Philippines — The country’s trade deficit narrowed by 40.6 percent in December 2019 as exports registered double-digit growth and imports contracted, the Philippine Statistics Authority (PSA) reported yesterday.
Total external trade in goods in December 2019 amounted to $13.96 billion, an increase of 2.4 percent from $13.63 billion in the same month the previous year and snapping an eight-month decline.
Out of the total external trade, $5.74 billion were earnings from exports while $8.22 billion were imports.
This brought the country’s balance of trade in goods in December 2019 to a $2.48 billion deficit, lower by 40.6 percent from the. $4.17 billion gap in December 2018.
Exports grew by 21.4 percent year-on-year to $5.74 billion in December 2019 from $4.73 billion in December 2018 as nine of the country’s top 10 export commodities registered strong growth.
These were cathodes and sections of cathodes; fresh bananas; gold; electronic products; chemicals; machinery and transport equipment; other manufactured goods; ignition wiring sets; and coconut oil.
Imports, meanwhile, contracted by 7.6 percent to $8.22 billion in December 2019 from $8.90 in December 2018 as seven of the country’s top import commodities contracted.
These were: iron and steel; cereals and cereal preparations; industrial machinery and equipment; plastics in primary and non-primary forms; other food and live animals; electronic products; and transport equipment.
The National Economic and Development Authority (NEDA) said the government should step
up its efforts against downside risks brought by health- and climate-related hazards that can affect the trade sector.
These include the aftermath of the eruption of Taal Volcano in Batangas as well as the prevailing outbreak of the novel coronavirus, the epicenter of which is in China, one of the country’s top trading partners.
“The impact of the novel coronavirus could escalate if plant closures related to the production of automotive and electronic parts negatively affect the country’s exports receipts as this accounts for about a third of the country’s outward shipments to China,” said Socioeconomic Planning Secretary Ernesto Pernia.
“While the spread of the virus is a national and global concern, there are still areas of opportunity that the country could optimize to offset possible fallout from the spread of the virus,” he added.
In the near term, the production of health and hygiene products could expand both in the domestic and exports markets.
Pernia said the government must encourage foreign firms to increase their investments in or relocate to the Philippines to further strengthen its position in the value chain.
“We must cultivate an environment that encourages and supports businesses with streamlined procedures and reduced transaction costs,” he said.
He also said that the country should persist in its efforts to diversify Philippine products and market partners through aggressive campaigns on product branding and business matches that will reach non-traditional partners in order to de-concentrate its exposure to limited markets.
Source: https://www.philstar.com/business/2020/02/12/1992300/trade-deficit-narrows-41-december