By Chino S. Leyco
The country’s trade deficit narrowed in August after imports contracted by double-digits while exports posted a snail’s pace growth, data from the Philippine Statistics Authority revealed yesterday.
The total trade of the Philippines registered a deficit of $2.41 billion, lower by 29 percent compared with $3.39 billion in the previous month. Year-on-year, it was also down by 33 percent from $3.6. billion.
In August, exports marginally increased by 0.6 percent to $6.25 billion from $6.21 billion a year before, while imports valued at $8.66 billion, down 12 percent year-on-year from $9.81 billion.
Socioeconomic Planning Secretary Ernesto M. Pernia said the government should redouble efforts to support export products where the country has comparative advantage so the trade sector recovers and picks up more steam.
“We must continue to initiate programs that provide comprehensive packages of support for products with comparative advantages, including related industries, to facilitate expansion in the international market,” Pernia said in a statement.
While serving to narrow the gap in trade deficit, Pernia said the persistent decline in imports may be an area of concern as production in sectors requiring import components have also decreased.
“As subdued investments in emerging markets, coupled with the persisting trade tensions, continue to hamper global expansion, implementation of timely reforms will vastly improve the country’s resilience to external shocks,” Pernia said.
Business models should also adapt to current demands and market trends by utilizing digital platforms that will increase production efficiency and expand their reach both locally and internationally, he added.
The official also cited that legislations such as the proposed amendments to the Foreign Investment Act, Public Serve Act, and Trade Liberalization Act would go a long way in improving competitiveness through much needed foreign direct investments and innovation.