By Cai Ordinario, April 12 2019; Business Mirror
Image Credit to Business Mirror
THE Philippines continues to be reliant on China for imported goods as Beijing accounted for a third of Manila’s trade deficit in February, according to data released by the Philippine Statistics Authority (PSA) on Thursday.
PSA data showed that in February, the country’s trade deficit with China reached nearly a billion at $952.66 million, accounting for 34.17 percent of the country’s deficit for the month.
The country’s total trade deficit narrowed to $2.79 billion in February, from $3.9 billion in January. Imports reached $7.97 billion, while exports amounted to $5.18 billion for the month, according to PSA data.
“The Philippines trade deficit narrowed in February, reaching $2.8 billion,” JP Morgan Chief Economist for Asean Sin Beng Ong said in a statement. “We expect the recent stabilization trend to continue into 2Q19 owing to the delay in the passage of the 2019 budget and an election spending ban, which may dent capex momentum, posing downside risk to the overall growth outlook in the first semester in 2019.”
Data showed the Philippines has a trade deficit with 16 countries as well as other countries that were not identified by PSA.
The country only has trade surpluses with three economies—Hong Kong, worth $489.1 million; the United States, $372.75 million; and the Netherlands, $149.53 million. Apart from China, the country has large trade deficits with Korea, $455.88 million; Indonesia, $406.57 million; and Thailand, $354.34 million.
The National Economic and Development Authority (Neda) said this is why the country is pursuing the improvement of its relations with trading partners. This will also enable the Philippines to weather headwinds in the global export market.
“In its effort to strengthen bilateral economic relations, the Department of Trade and Industry recently concluded dialogues with the UK, Hungary and Czech Republic,” Neda Officer in Charge (OIC) and Undersecretary Adoracion M. Navarro said.
The Philippines also signed a memorandum of understanding with Indonesia that could open up the Indonesian market to Philippine agricultural produce, particularly bananas and coconut-based products.
The Neda official added that more exports of agricultural products to Eastern Europe are also under way following the export promotion mission conducted by the Department of Agriculture and private sector representatives in Belarus.
“For the recovery in exports performance, facilitating easier movement of goods is crucial,” Navarro said.
The Bureau of Customs (BOC) earlier issued a memorandum order temporarily banning importers, truckers, brokers and other port stakeholders from returning empty containers to ports, except those covered by a special permit.
Moreover, a joint administrative order is expected to be released this month, which will institutionalize measures to address concerns over high shipping fees and congestion in the Port of Manila and Manila International Container Port.
“While these are positive developments, further actions such as the optimization of the use of the country’s other major ports in Batangas and Subic, and streamlining the BOC’s processes are still necessary,” she said.
The country’s total external trade in goods in February 2019 amounted to $13.14 billion, reflecting an increment of 1.2 percent from the $12.99 billion recorded value during the same month of the previous year.
Of the total external trade, $5.18 billion or 39.4 percent were exported goods, and $7.97 billion or 60.6 percent were imported goods.
The country’s total export sales in February 2019 was $5.18 billion, indicating contraction of 0.9 percent, from the $5.23 billion total export sales in February 2018. Total imports grew 2.6 percent, from $7.76 billion in February 2018 to $7.97 billion in February 2019.
Total receipts from the top 10 major exports amounted to $4.2 billion or a share of 81.1 percent of the total export. This recorded a contraction of 0.7 percent from the February 2018 export value of $4.23 billion.
Electronic Products continued to be the country’s top export with total earnings of $2.82 billion. This amount, which accounted for 54.4 percent of the total export revenues in February 2019, posted an increment of 0.8 percent, from $2.8 billion export receipt in the same month of the previous year.
Components/Devices or Semiconductors accounted for the biggest share of 38.7 percent, among the electronic products. It contracted by 2.1 percent to $2 billion in February 2019, from $2.05 billion in February 2018.
Meanwhile, the country’s total import bill for the country’s top 10 imports in February 2019 reached to $5.91 billion, an increase of 3.9 percent from the February 2018 import value of $5.69 billion.
Import payments for Electronic Products, valued at $2.04 billion, accounted for the highest total imports with a share of 25.6 percent to the total imports. Import of this commodity group declined by 4.1 percent, from the $2.13 billion posted in February 2018.
Among the electronic products, Components/Devices (Semiconductors) accounted for the biggest contribution of 18.3 percent. It dropped by 1.2 percent, from $1.47 billion in February 2018 to $1.45 billion in February 2019.