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Philippine imports touched all-time high in September, bulging the national trade deficit to its highest level and adding fuel to already hot inflationary fires.
President Rodrigo Duterte's touted infrastructure-spending drive, the Philippine Statistics Authority (PSA) said on Wednesday.
The newly released data showed that they were 26.1% up in September, hitting a record high of US $ 9.75 billion. These were up 50% from a year earlier, and industrial machinery and equipment, up 17.3%.
Duterte has vowed its government will "build, build, build" a new "golden age" of infrastructure after they have failed to realize their own big plans for new roads and rails.
The PSA will be released on Thursday. The release will be watched by the government recently revised by 7-8% GDP growth target for the year to 6.5-6.9%.
The trade deficit widened to US $ 3.9 billion in September, Reuters reported.
The deficit spanning the January-September period rose to US $ 29.9 billion, up from US $ 17.5 billion over the same period last year, the report said.
Rising imports were met with falling exports, which dipped 2.6% to US $ 5.8 billion. Shipments had risen for three months before September's fall.
The trade imbalance is expected to put the pressure on the peso, which has slid near 13-year lows vis-à-vis the US dollar in recent months despite two recent 50 basis point benchmark interest rate hikes.
The biggest headache for government economic managers is galloping inflation, which is more important in recent months.
PSA reported on Tuesday, June 16, 2008, the same rate recorded in September. Government of Canada has expressed confidence in the recent surge has steadied, though analysts and economists are uncertain.
It is not immediately clear that much recent government moves to reduce import quotas on certain food products, including rice, contributed to the record-high imports.
PSA said on Tuesday that food and non-alcoholic drinks accounted for 3.7 percentage points of headline inflation, but was down as much as 9.7% in September to 9.4% in October.
Politically sensitive prices, which account for nearly 10% of the inflation rate, were up 10.7% in October versus 10.4% previously, local reports said.
PSA said October's price pace brought year-to-date inflation to 5.1%, well beyond the central bank's 2-4% target band.
Authorities have recently said they would like to rein-in inflation to 4% next year, in part by loosening further import quotas on rice. But a rising trade deficit threatens to further depreciate the peso, making imports more expensive while driving up local prices.
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