Phl trade statistics may be under recorded – Credit Suisse

MANILA, Philippines - Credit Suisse has warned the Philippines’ trade data may be under-recorded due to smuggling and this may mean current account surplus is actually smaller than what is officially reported.

A smaller or deteriorating current account surplus in turn lessens the country’s buffers against external crisis and may be signs the economy could eventually overheat, the financial services company added.

“(T)he country’s actual trade numbers might not be as strong as is officially reported,” Michael Wan, an economist at Credit Suisse, said in a report titled The Philippines: A false positive?

“There is indeed a sizeable difference between the trade balance numbers as reported by the Philippines and some of its trading partners... The divergence is more pronounced in the country’s imports than its exports across a number of countries we have looked at,” Wan said.

Due to a number of discrepancies between Philippine trade data and other countries’, Wan said this may mean trade deficit may not just be under-recorded, it may also be deteriorating.

“One potential, but perhaps incomplete, explanation for this divergence in trade numbers lies in the presence of significant smuggling activity in the Philippines,” Wan said.

But he also noted export and import numbers “seldom tally” as some analysts attribute this to transport and miscellaneous costs, exchange rate differences, and classification issues, among others.

“Nonetheless the data differences we have highlighted for the Philippines are still sizeable when we compare equivalent number for other countries such as Thailand,” Wan said.