Philippines: Exports dip again in January
Merchandise exports continued falling at the outset of 2019. Exports contracted 1.7% in annual terms in January, although this was a much softer decline than December’s 12.3% tumble. Exports of electronic equipment and parts; metal components: gold; and machinery and transport equipment all fell sharply in January. On the flip side, electronic products shipments—which account for more than half of total export revenue—rebounded slightly in January from their steep contraction in December (January: +1.7% year-on-year; December: -15.2% yoy).
Imports meanwhile recovered 5.8% over the same month a year prior in January from the 9.4% decrease recorded in December. 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. Further details of the print show consumer goods imports rose at a healthy pace in the month, signaling consumer spending was strong at the outset of the year. Moreover, capital goods imports recovered in January.
Overall, the merchandise trade deficit widened to USD 3.8 billion in January from the USD 3.2 billion deficit logged in January 2018 but was unchanged from December’s deficit.
Commenting on the outlook for the external sector, Nicholas Mapa, senior economist at ING noted:
“The ongoing [U.S-China] trade war means that the Philippine export sector will need to continue to build on sector-changing reforms to help boost productivity, by enhancing supply chains and increasing standards. With the government’s “build build build” initiative seen to help boost efficiencies, perhaps the export sector can take advantage of this push and we can see the export renaissance that we’ve all been waiting for.”