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Merchandise exports slipped for a fifth consecutive month in May as imports rose, but at a slower pace, bringing the trade deficit to its highest level this year. preliminary figures from the Philippine Statistics Authority (PSA), merchandise exports fell 3.8% to $ 5.762 billion in May, a slight improvement over the contraction of 4, 9% observed in April The most recent figure for merchandise exports reached $ 26.914 billion, down 5% from $ 28.33 billion in five comparable months in 2017 and further from growth 9% target for 2018.
According to the main types of goods, manufactured goods – which accounted for 83.8% of total shipments abroad – fell by 2.7% to to $ 4.830 billion.
were exports of mineral products (-6.9%), agri-food products (-23.2%) and petroleum products (-66.6%) to $ 374.781 million, $ 363.978 million. dollars and $ 9.673 million respectively.
<img class = "aligncenter wp-image-171971 size-full" src = "http://bworldonline.com/wp-content/uploads/2018/07/PH_Performance_071118.jpg" alt = "Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines (UnionBank), said the decline in exports in May was expected given the "softer" sales to abroad so far this year. year
"However, it should be noted that the country's largest electronics exports actually increased by 2.3% [to $3.133 billion]. This may be a sign of a positive recovery … "Asuncion said May was" the best month for exports. "
Cumulatively, exports of electronics increased by 3 , 1% to 14.883 billion dollars.This figure is compared to manufactured goods, which recorded a decline of 4.7% over the same five months.
The country's trade gap s & # 39.6% is widened to 3.701 billion dollars in May from 2.507 billion dollars per year Payments to imports increased 11.4% to 9.462 billion dollars this month, although slower than growth of 23.1% in April and 20.2% in May 2017.
The May trade deficit was the largest since December 2017. Michael L. Ricafort, economist at Rizal Commercial Banking Corp. ( RCBC), said that the slowdown in import growth during the month could be due to the weakness of the exchange rate of the peso against the dollar and the rise in world commodity prices.
"The lower price of the peso and the oil [and other] made imports more expensive from the point of view of local buyers, thus leading to some reduction in the growth of import demand," he said. he declares. -date, the co The state's trade balance posted a deficit of $ 15.766 billion, compared with the gap of $ 10.164 billion recorded in five comparable months in 2017.
Merchandise imports have increased by 10.9% in January-May, exceeding the government's 10% target. In 1965, the value of imports of raw materials and intermediate goods increased by 4.3% to $ 3,476 billion [19659003] Equipment goods, which accounted for 33.4% , rose 10.1% to $ 3.163 billion. with a 16.1% share, it increased 11.6% to $ 1.525 billion, while mineral fuels, lubricants and related materials increased 41.6% to $ 1.257 billion [19659003] OUTLOOK
but still predict that the trade deficit will remain high due to sustained growth in imports.
"Exports could begin to grow again in the coming months [at] around 1-2% growth in June 2018 with the US recovery / world economy.The weakness of the peso exchange rate could make Filipino exports more competitive from the point of view of international buyers and could support some resumption of export demand ", explained Mr. Ricafort of RCBC
. risk factors remain, including the escalation of the trade war between the United States on the one hand and China, the European Union and other developed countries on the other hand, which could slow world trade; rise in global inflation and interest rates in the context of rising global oil prices; As for imports, Mr Ricafort was expecting "relatively stronger" growth from one year to the next due to the decrease in base effects.
Other Important Factors Could Support Continued Growth in Imports, According to Ricafort, a "sustained" increase in foreign and local investment would require more inbound deliveries of capital goods, a recovery in manufacturing and construction that would require more imports of construction materials and other raw materials, and an increase in household spending. For UnionBank's Asuncion, the slowdown in import growth in May "could signal" a further slowdown in June and July due to "seasonal" factors.
"However, import growth is generally and always In response to the issue of prospects to achieve the Government's nine-percent export growth target, Mr. As Union said that although it would be possible, such a pace would be "really difficult in the new environment."
"At the beginning of the year, the wait was continuing, but the current environment with the threat of 39, a trade war between the United States and China, whose impact on Asian countries is undetermined, is unresolved on the initial projection of export growth, "he declared
. 2018 is still in range and, therefore, can make a positive contribution to economic growth "in a more optimistic scenario."
In a statement, Ernesto M. Pernia, secretary for socio-economic planning, cited the promulgation of the ease of doing The law of 2018 and the opportunities offered by free trade agreements as factors that can facilitate business transactions and improve the business climate for exporters.
The United States was the Philippines' leading export market in May with a market share of 14.6% to 840,146 million dollars, followed by Hong Kong's 13.8% market share (796,468 million) and 13.2% (761,405 million).
The same month, China is the Philippines' leading source of imports. 20.3% in May ($ 1.924 billion), followed by market share of South Korea by 10.3% ($ 978.611 million) and 9.5% ($ 901.266 million). – Lourdes O. Pilar
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