MANILA, Philippines — The country’s trade deficit narrowed to $2.41 billion in August, as exports rose modestly and imports continued to decline, the Philippine Statistics Authority (PSA) reported yesterday.
Total external trade in goods in August reached $14.91 billion, down by seven percent from $16.03 billion in the same month last year.
Exports rose by 0.6 percent to $6.25 billion during the month from $6.22 billion last year while imports declined to $8.66 billion from $9.81 billion in August last year.
This caused the balance of trade in goods to narrow by 33.1 percent from $3.60 billion in August 2018.
The modest growth in exports was attributed to the positive performance of agro-based products, forest and electronic products.
Imports, meanwhile, contracted because of declines in imports of raw materials, intermediate goods, and capital goods.
The National Economic and Development Authority (NEDA) said while this narrows the trade gap, the persistent decline in imports may be a concern as production in sectors requiring import components have 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,” said Socioeconomic Planning Secretary Ernesto Pernia.
He said the government should redouble efforts to support export products where the country has comparative advantage in.
“We must continue to initiate programs that provide comprehensive packages of support for products with comparative advantages, including related industries, to facilitate expansion in the international market,” he said.
The country should also deepen its relations with our usual trade partners while actively seeking new ones, he added.
He said business models should also adapt to current demands and market trends by utilizing digital platforms that will increase production efficiency and expand their reach both locally and internationally.
Reforms that will pave the way for attracting more investments such as the proposed amendments to the Foreign Investment Act, Public Serve Act, and Trade Liberalization Act would go a long way in improving competitiveness through much needed foreign direct investments and innovation, said Pernia.