By Chino S. Leyco
The country’s trade deficit rose anew in July, halting its two straight months of recovery, after exports rebounded while imports slightly contracted during the month, the Philippine Statistics Authority (PSA) reported yesterday.
The July trade gap jumped 37 percent to $3.39 billion from $2.47 billion in the previous month. However, the latest figure was lower by 15 percent compared with $4.02 billion in the same month last year.
Based on the PSA data, total exports amounted to $6.17 billion in July, an increase of 3.5 percent year-on-year from $5.97 billion, while import was higher at $9.57 billion although the figure was 4.2 percent lower compared with $9.98 billion in the same month in 2018.
In a statement, Socioeconomic Planning Secretary Ernesto M. Pernia said exports’ positive growth was maintained for the fourth consecutive month in July due to higher revenues from agro-based products, forest products, and manufactures to include electronic products.
The country registered the third highest exports growth among selected Asian economies, following Thailand and Vietnam.
“Philippine exports remained resilient during the second quarter of 2019 despite the continuing external challenges such trade tensions between the US and China, the bleak outlook in Europe, and the uncertainty of the future of Brexit,” Pernia said.
On the other hand, imports decline was owing to lower payments for raw materials and intermediate goods as well as mineral fuels, lubricant and related materials.
Pernia said that the effects caused by the long-standing trade tensions between the United States and China were beginning to show as global manufacturing sentiment continued to falter with manufacturing purchasing manager indexes for powerhouses like Japan, South Korea, Taiwan sustaining declines in July.
“The country’s manufacturing sector is expected to sustain its growth despite the overall decline in global manufacturing. We are optimistic as we see a reduction of global oil prices, the recent cuts in electricity rates, and the lower import costs due to the appreciation of the peso,” Pernia said.
He added that sustaining this optimism may find relevance in the government’s goal of attracting foreign investments in the country. The country’s resiliency against its competitors in the region may attract locators seeking alternatives to China, where goods are subject to increasing US tariffs.
Also, the timely conclusion of the negotiations of the Philippine-South Korea Free Trade Agreement and the Regional Comprehensive Economic Partnership would further expand trade and investment opportunities for the Philippines.