The country’s trade gap shrunk in August versus the same period a year ago as imports posted a double-digit decline while exports recorded flat growth, data released by the Philippine Statistics Authority (PSA) showed.
According to PSA data posted on its website yesterday, the country’s balance of trade in goods recorded a $2.41-billion deficit in August 2019, lower by 33.1 percent than the $3.6-billion deficit in August 2018.
Total imported goods in August declined by 11.8 percent, from $9.81 billion in the same month last year to $8.66 billion, as major commodity groups posted declines in imports of raw materials, intermediate goods and capital goods.
Total export sales in August on the other hand was $6.25 billion, reflecting a paltry increase of 0.6 percent from the $6.22 billion total export sales in August 2018, backed by the modest performance of agro-based products, forest and electronic products.
The total external trade in goods in August reached $14.91 billion, down 7 percent from the $16.03 billion external trade in the same month last year.
The National Economic and Development Authority (NEDA) said while serving to narrow the gap in trade deficit, the persistent decline in imports may be an area of concern as production in sectors requiring import components have also decreased.
The agency further said in a statement yesterday the government should redouble efforts to support export products where the country has comparative advantage so the trade sector recovers and picks up more steam.
“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,” Ernesto Pernia, socioeconomic planning secretary, said in the statement.
“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,” Pernia added.
NEDA 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.
According to Pernia, legislations 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.
Relatedly, the country should deepen its relations with the usual trade partners while actively seeking new ones, NEDA said.
“As the market turns its focus toward advanced and frontier technologies, the country’s human capital development should prioritize intensified reskilling, retooling and upskilling initiatives that emphasize industry and academe coordination, to ensure that the labor market is adaptive and responsive to current and emerging market demands,” Pernia said.