Philippines posts biggest trade deficit in five months

MANILA (Phillippine Daily Inquirer/Asia News Network): The Philippines posted its widest trade deficit in five months for January as exports fell sharply, pointing to a worsening trade balance that could put pressure on the peso in the near term.

The trade gap in January widened by 27.2 per cent to US$5.74 billion, the biggest since the record monthly deficit of $6 billion in August, from $4.5 billion in the same month last year, preliminary data from the Philippine Statistics Authority showed on Tuesday (March 14).

Exports saw the steepest decline in nearly three years, down 13.5 per cent to $5.2 billion from a year earlier, while imports grew 3.9 per cent to $11 billion from the same period in 2022.

It was the first monthly rise for imports in three months.

The January trade gap was worse than the deficit of around $4.3 billion that ING had projected.

For the full-year 2022, the country’s trade deficit increased by 38 per cent to $58.3 billion from year-ago level, as imports showed signs of recovery from market disruptions caused by the global outbreak of Covid-19 in 2020.

“The persistent trade deficit in the Philippines points to depreciation pressure for...the Philippine peso in the near term,” ING senior economist Nicholas Mapa said.

The peso has fallen more than 2 per cent since hitting 53.65 per US dollar on Feb. 3, which was the strongest close so far this year. It was at 55.03, as of 0216 GMT.

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