THE Philippines’ trade deficit narrowed in July as imports dropped amid double-digit growth in exports, prompting optimism from the government about prospects for the rest of the year.
“The country’s balance of trade in goods … [was]$1.65 billion in deficit in [July] 2017, lower than the $2.37 billion in July 2016,” the Philippine Statistics (PSA) reported on Tuesday.
Exports rose by 10.4 percent to $5.28 billion year-on-year while imports slipped 3.2 percent to $6.93 billion. In the first seven months of 2017, the trade deficit narrowed by 4.6 percent to $14.66 billion from $15.37 billion.
The National Economic and Development Authority (NEDA) said Association of Southeast Asian Nations (Asean) agreements and the Philippines’ integration with the larger Asia-Pacific region would provide a further boost.
The Philippines, the NEDA noted, saw total trade post 2.3 percent growth in July 2017, higher than the previous month’s 1.5 percent.
With merchandise trade growing to $12.2 billion, the total for the first seven months of 2017 rose to $87.8 billion, 10.3 percent higher from last year.
“Our country’s trade performance is consistent with the Asian trade growth. We are optimistic that higher growth will be achieved for the remaining months of the year,” Socioeconomic Planning Secretary Ernesto M. Pernia said.
The NEDA said “remarkable” July export growth rates were observed in Hong Kong (26.2 percent), Thailand (24.2 percent), South Korea (31.8 percent), Malaysia (31.6 percent), and Vietnam (16.4 percent).
Imports from the Asean region grew 8.5 percent, led by Indonesia (44.3 percent) and Vietnam (50.8 percent), it also noted.
The agency pointed out that Asean member states had agreed during recent meetings to prioritize trade in goods and trade facilitation, among others.
“For the region, this means a chance to double intra-Asean trade by 2025. For the Philippines, this means strengthened economic ties with our neighbors and a chance to deepen our partnerships,” Pernia said.
He also noted that the proposed Regional Comprehensive Economic Partnership (RCEP) agreement would provide opportunities for all economies involved.
RCEP includes the ten Asean member states and trading partners China, Korea, Japan, Australia, New Zealand, and India.
“This partnership may facilitate more exchange of goods and services, attract investments, create more jobs, and improve the standard of living,” Pernia said.
Asean accounts for 21.7 percent of the Philippines’ total trade while the share of RCEP economies is a much larger 60.5 percent.