MANILA, Philippines — The country’s trade deficit continued to widen in January, as the country’s prized exports posted huge declines, which an analyst noted crimped the peso’s ascent at the start of the year.
Data released by the Philippine Statistics Authority on Tuesday showed the trade deficit expanded 27.2% year-on-year to $5.74 billion in January. A trade deficit occurs when the country’s imports bill outgrows export sales.
The January gap was also bigger than the $4.5 billion trade deficit recorded in December.
Overall, the country’s external trade was shaved 2.4% on-year to $16.2 billion in January. This proved to be a better outturn compared to an 8.9% contraction in December.
Data broken down showed exports plunged 13.5% year-on-year to $5.23 billion in January. Shipments of electronic products, the country’s top exports, fell 19.2% on an annual basis to $2.83 billion.
Imports, on the other hand, advanced 3.9% compared to a year ago to $10.9 billion in January. The imports bill expanded on the back of expensive mineral ore and fuel shipments into the country.
Sought for comment, Nicholas Antonio Mapa, senior economist at ING Bank in Manila, said the latest trade data dragged the peso’s performance against regional currencies.
“Wider than expected trade deficit was one of the main reasons for PHP lagging the January Asia fx rally,” he said in a Viber message.
Mapa attributed the decline in exports from softening demand from China and in electronics.
“We could see exports recover in coming months should the China reopening gather steam,” he added.