Philippines: Trade deficit widens in July to third worst on record - ING

Nicholas Mapa, Senior Economist at ING, notes that Philippines import growth accelerated 32% year-on-year in July, the fastest rate since June 2016 while exports languished, eking out a 0.3% gain in July.

Key Quotes

“Philippine imports in July accelerated by 32% YoY to deliver another month of robust growth. Capital equipment, oil and consumer imports powered overall import growth, translating to annual growth rates of 39%, 36% and 22%, respectively.”

“Positive demand was seen across all subsectors, reflecting strong expansion in the GDP components of consumption, investment and government spending.”

“The strong import performance coupled with a weak export sector resulted in a further widening of the trade deficit.”

“The trade deficit in July of $3.55 billion was the third worst trade deficit on record and also the third worst trade deficit during this administration.”

“The worst trade deficit of $3.97 billion was posted in December 2017 while the second worst was in May 2018 (at -$3.69 billion).”

“The 7-month 2018 trade deficit reached $22.5 billion, 72% wider than the deficit of $13.1 billion in the same 7-month period of 2017.”

“The weak Philippine peso contributed to the weak trade performance.”