Philippine trade deficit for November hits $3.9 billion

January 10, 2019

The Philippines trade deficit for November declined to $3.9 billion from the previous month's record $4,21 billion, the Philippine Statistics Authority (PSA) said Thursday.

Exports were reported at $5.57 billion while imports logged at $9.47 billion.

In October, exports were at $6.11 billion while imports came in at $10.32 billion resulting in the $4.21 billion trade gap.

''November’s trade performance is largely due to the slowdown in imports, which moderated to 6.8 percent, after recording double-digit growth rates since April 2018. Imports growth is attributed to the increase in purchases of most commodity groups, except consumer goods,'' said the National Economic and Development Authority (NEDA) in a statement.

“Moderation in global growth appears inevitable in 2019. Given a less encouraging global economic outlook, the country needs to ramp up the implementation of strategies outlined in the Philippine Export Development Plan 2018-2022,” Socioeconomic Planning Secretary Ernesto Pernia said.

He added that supporting micro, small, and medium enterprises (MSMEs) is necessary to increase their participation in global value chains.

“Simplifying loan processes, provision of financial literacy trainings, and facilitation of linkages between MSMEs and large corporations are some ways to spur the internationalization of MSMEs,” Pernia said.

Pernia emphasized the importance of reforming the Foreign Investment Act to allow foreign firms to transfer manufacturing facilities to the Philippines to serve domestic and regional (ASEAN) markets.

“A widening current account balance due to rising capital goods imports and anemic exports growth is a cause for concern. The widening gap emphasizes the need to reform legislation to allow foreign investments in firms catering to the domestic market, in addition to expanding their exporting activities,” Pernia said.

He added that a low-hanging fruit is the full implementation of the Ease of Doing Business Act, which calls for the creation of the Expanded Anti-Red Tape Authority and the full operationalization of the National Single Window.  Both measures will benefit existing firms, encouraging expansion, as well as attract new firms to do business in the country. DMS