The Philippines’ total merchandise trade dipped for the fifth consecutive month in August, based on data from the Philippine Statistics Authority (PSA).
The total merchandise trade in August 2019 reached US$14.91 billion, down 7% from $16.03 billion year-on-year.
For the same period in review, exports rose a slight 0.6% to $6.25 billion from $6.22 billion, resulting from improved sales in three of the top 10 major export commodities: gold (93.2%); ignition wiring sets and other wiring sets used in vehicles, aircraft and ships (7.6%); and electronic products (6.6%). This is the fifth month in a row of increase for exports.
By major trading partners, exports to the United States comprised the highest value followed by China, Hong Kong, Japan, and Singapore.
Imports, on the other hand, slipped to $8.66 billion, the fifth consecutive month of decline. This is 11.8% lower than the $9.81 billion last year and was due to decrements in eight of the top 10 major import commodities. These were iron and steel (-44.2%); transport equipment (-29.1%); cereals and cereal preparations (-23.4%); industrial machinery and equipment (-15.3%); mineral fuels, lubricants and related materials (-11.9%); plastics in primary and non-primary forms (-8.7%); electronic products (-6.0%); and other food and live animals (-4.4%).
China remained the Philippines’ biggest supplier of imported goods, while other major import trading partners were Japan, US, Indonesia, and South Korea.
Electronic products continued to be the country’s top import and export products.
The country’s balance of trade in goods recorded a $2.41 billion deficit in August 2019, lower by 33.1% from the $3.60 billion deficit in August 2018.
The National Economic and Development Authority (NEDA) said the persistent decline in imports may be an area of concern as production in sectors requiring import components has 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,” NEDA director general and Socioeconomic Planning Secretary Ernesto Pernia said in a statement.
He said business models should also adapt to current demands and market trends by utilizing digital platforms that will increase production efficiency and expand businesses’ reach both locally and internationally.
“Legislation such as the proposed amendments to the Foreign Investment Act, Public Service Act, and Trade Liberalization Act would go a long way in improving competitiveness through much needed foreign direct investments and innovation,” Pernia said, adding that the country should deepen its relations with its usual trade partners while actively seeking new ones.
“As the market turns its focus toward advanced and frontier technologies, the country’s human capital development should prioritize intensified reskilling, retooling and upskilling initiatives that emphasize industry and academe coordination, to ensure that the labor market is adaptive and responsive to current and emerging market demands,” he noted.
Moving forward, the current updating of the Philippine Development Plan 2017-2018 will seek to address the challenges in the agriculture, industry and services sectors, among other sectors.