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Philippines posts biggest trade gap in June
MANILA, Philippines — The country’s trade gap widened to a record $5.84 billion in June, as imports continued to grow beyond exports, according to the Philippine Statistics Authority (PSA).
Preliminary data from the PSA showed the balance of trade or difference between the country’s exports and imports reached $5.84 billion in June, 75.4 percent higher than the $3.33 billion deficit recorded in the same month last year.
The June trade gap is also higher than the $5.55 billion deficit in May.
The value of the country’s imports climbed 26 percent to $12.49 billion in June from $9.91 billion in the same month a year ago.
Nine of the top 10 major commodity groups recorded growth, with mineral fuels, lubricants and related materials posting the biggest uptick at 125.1 percent.
Other commodities that recorded year-on-year increases in June are iron and steel, telecommunication equipment and electrical machinery, other food and live animals, transport equipment, electronic products, plastics, industrial machinery and equipment, and miscellaneous manufactured articles.
PSA data showed the country’s exports rose by only one percent to $6.64 billion from $6.58 billion.
Of the top 10 major commodity groups for exports, five posted increases led by other mineral products, which rose 75.8 percent.
Other commodity groups that grew in June were coconut oil, chemicals, other manufactured goods, and machinery and transport equipment.
For the first semester, the trade gap ballooned to $29.79 billion compared to the $17.95 billion trade deficit in the same period a year ago.
Imports for the first six months amounted to $68.32 billion, up 26.7 percent.
As of the first half, the country’s exports rose 7.1 percent to $38.53 billion from the previous year’s $35.98 billion.
Despite the trade gap reaching its all-time wide in June, Socioeconomic Planning Chief Arsenio Balisacan said he is not concerned about it.
Large importations for construction are expected as the government ramps up spending for infrastructure.
“We would expect trade deficits to continue and to increase. But again, the expectation is these investments we are putting in place, improvement in transport, connectivity and better facilities will improve the competitiveness of our industries particularly our exports and we will get dividends from these investments,” he said.
ING Bank Manila senior economist Nicholas Mapa said the widening trade gap could weigh on the country’s economic growth.
“Economic planning secretary Balisacan suggested that the trade gap could widen further in the coming months, pointing to a sustained drag on overall GDP (gross domestic product ) for the rest of the year,” he said.
Source: https://www.philstar.com/business/2022/08/10/2201474/philippines-posts-biggest-trade-gap-june