The trade deficit for goods in the Philippines decreased in August to its lowest point in two months due to a rise in exports, balancing out the ongoing decrease in imports.
Preliminary data from the Philippine Statistics Authority (PSA) showed the trade-in-goods balance — the diff
The difference between exports and imports was a deficit of $4.13 billion.fi
The trade deficit in August was smaller than the $4.2 billion deficit in the previous month and the $6.03 billion decrease.fi
In August of last year, the citizen arrived.
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Over the first eight months, there was a decrease in the trade deficit from $41.86 billion to $36.31 billion compared to the previous year.
In August, the total amount of goods sold for export increased by 4.2% compared to the previous year, reaching a total of $6.7 billion. This was a significant improvement from the 1.7% decrease in sales seen in August 2022. This 4.2% growth in exports was the highest in nine months, surpassing the 13.1% growth seen in November 2022.
In August, the export earnings reached the highest amount in two months, or since June when it was $6.703 billion.
Exports decreased by 6.6% to $47.81 billion in the eight-month period leading up to August.
In contrast, the nation’s purchase of goods from foreign sources decreased by 13.1% compared to the previous year, totaling $10.83 billion in August. This marks a change from the 26.4% increase observed in August of 2022.
In August, the cost of imports reached its peak in the last three months, equivalent to May’s amount of $10.92 billion.
Between January and August, the total value of imports decreased by 9.6% to $84.12 billion.
In an email, Makoto Tsuchiya, an assistant economist at Oxford Economics, stated that the primary factors behind the increase in August exports were manufacturing goods, specifically electronics and minerals. According to Tsuchiya, these goods showed a sequential improvement, indicating a potential boost in external demand for goods from the Philippines.
According to Mr. Tsuchiya, the decrease in imports is still widespread.fl
Identifying the low demand in the domestic market.
According to the speaker, the adjusted trend suggests that imports are decreasing, but not as significantly as the year-on-year growth. This could mean that imports may soon reach their lowest point, at least in terms of sequential comparison.
In August, the total value of exports increased by 3.6% to $5.48 billion, with manufactured goods making up 81.8% of the total.
In August, goods in the electronics category accounted for over 50% of all exports and saw a 6.1% increase, reaching a total value of $3.88 billion.
Nearly 50% of the overall exports consisted of semiconductors, experiencing a significant increase of 14% to reach a total of $3.12 billion.
In August, the majority of exported goods were still headed to the United States, totaling $1.1 billion and making up 16.4% of all exports. Japan received $918 million worth of exports, followed by Hong Kong with $871 million and China with $838 million.
In August, the total imports saw a decrease of 18.9% to $3.86 billion, with raw materials and intermediate goods accounting for 35.6% of the total imports.
In August, there was a 19.3% decrease in imports of capital goods, totaling $2.73 billion.
Alternatively, there was an 18.2% rise in mineral fuels, lubricants, and related materials, reaching a total of $1.97 billion. Additionally, consumer goods experienced a 20.6% increase, reaching a total of $2.24 billion.
In August, China accounted for the largest portion of imported goods at 22.4%, totaling $2.43 billion. Imports from Indonesia were valued at $977 million, followed by Japan at $787 million, South Korea at $777 million, and the United States at $752 million.
The Senior Economist at ING Bank N.V. Manila, Nicholas Antonio T. Mapa, predicts that the ongoing conflict between Israel and Palestinian Islamist group Hamas will cause a significant increase in global energy prices, resulting in a rise in the import expenses of the country.
In an email, he mentioned that the demand for Philippine exports may decrease due to a potential slowdown in global growth, either directly or indirectly.
Although there has been an increase in exports, Mr. Mapa does not anticipate a consistent rise in exports in the upcoming months.
According to the speaker, meeting the -4% export goal for this year will be a challenge as year-to-date exports are currently over 6% below target.
“Additionally, it is unlikely that imports will meet the projected -3% decrease for this year, as there has already been a 9.6% decrease in inbound shipments year-to-date. Our expectations are that imports will continue to be low due to a decrease in demand for capital goods and raw materials, as the high cost of borrowing has led to a decline in capital formation.”
Mr. Mapa was discussing the Bangko Sentral ng Pilipinas’ projections for the export and import figures.
The Philippine Exporters Confederation, Inc. President, Sergio R. Ortiz-Luis, Jr., stated that enhancements in the supply chain were a contributing factor to the increase in exports in August.
In a phone interview, he stated that the improved supply chain led to a slight increase in exported orders. He also mentioned that while the growth of orders is continuous, it is not significant at this point but is expected to improve.
The Development Budget Coordination Committee predicts a 1% increase in exports and a 2% increase in imports for this year.