Trade deficit seen to widen this year

MANILA, Philippines — Barcelona-based Focus Economics expects the Philippines to incur a wider trade deficit this year as imports continue to accelerate further.

Lindsey Ice, economist at FocusEconomics, said the trade gap could widen to $44 billion instead of $42 billion this year from last year’s $41.44 billion.

Ice said Focus Economics now sees imports growing faster at 7.8 instead of 7.6 percent, while exports are still expected to expand by 8.9 percent.

Latest data from the Philippine Statistics Authority (PSA) showed the country’s trade deficit widened by 19 percent to $3.76 billion in January from $3.16 billion in the same month last year.

Exports contracted by 1.7 percent to $5.28 billion while imports expanded by 5.8 percent to $9.03 billion.

“Stronger foreign purchases of transport equipment and foods such as cereals, which likely benefited from looser import quotas, drove the rebound. Growth was partially offset however by a contraction in imports of mineral fuels and lubricants,” Ice said.

Consumer goods imports rose at a healthy pace, signaling consumer spending was strong at the outset of the year, Ice said.

Capital goods imports recovered in January, he added.

Last year, the trade gap swelled by more than 51 percent to a new all-time high of $41.44 billion.

Imports went up by 13.4 percent to $108.93 billion last year while exports slipped 1.8 percent to $67.49 billion.

The country’s trade deficit has been steadily widening over the past few years from only $3.3 billion in 2014, $12.2 billion in 2015, $26.7 billion in 2016, $27.38 billion in 2017, and $41.44 billion in 2018.