MANILA, Philippines - The Philippine trade deficit will likely be reduced to $7.3 billion for 2013 from $9.7 billion recorded in 2012, according to JPMorgan Chase Bank NA.
“In coming months, we expect firmer export growth to be offset by continued strength in domestic demand,†Matt L. Hildebrandt, economist of JP Morgan Chase Bank NA, said in a report.
Hildebrandt said that the forecast trade deficit would translate into a balance of payment (BoP) deficit of five percent of gross domestic product (GDP), which will easily be offset by strong business process outsourcing (BPO) service sector exports and remittance inflows.
“Thus, we look for a current account surplus of 3.7 percent of GDP this year and an overall BoP surplus of 2.4 percent of GDP,†he added.
While JPMorgan noted that Philippine imports fell 0.9 percent in June, on a sequential trend basis imports rose 25.3 percent quarter-on-quarter.
It said the modest monthly decline was due to weak raw material and consumer goods imports while mineral fuels and capital goods imports rose.
Exports likewise fell, leaving the trade deficit basically unchanged at $370 million from $365 million in May.