11 October 2016
MANILA – Total merchandise trade grew by 4.7 percent in August 2016, rebounding from the previous month’s 6.6 percent decline, according to the National Economic and Development Authority (NEDA).
Based on a report by the Philippine Statistics Authority, total trade grew to US$11.8 billion in August 2016 from US$11.4 billion in July 2016. This is due to a double-digit increase in imports (12.2%) that offset the slight decline in exports (-4.4%).
“Strong domestic activity is expected to underpin demand for imports for the latter part of this year. The government should maintain a conducive environment for growth and continue addressing logistical bottlenecks to ensure the smooth flow of trade,” said NEDA Officer-in-Charge (OIC) and Deputy Director-General Rosemarie G. Edillon.
The double-digit growth of merchandise imports in August can be attributed to hefty increases in consumer goods, which grew by 59 percent, and capital goods, which grew by 29.9 percent.
Also, products of neighboring Asian economies drove up the country’s import payment. Hefty increases in imports from Indonesia, Thailand, China, Japan, South Korea, Hong Kong, and India were observed.
On the other hand, for merchandise exports, commodity groups like manufactures, agro-based products, and petroleum products experienced negative growth rates. But the decline in exports for August 2016 was slower than the double-digit declines observed in June and July.
“Given the sluggish external environment, the country should focus on diversifying its export markets and improving productivity and competitiveness of industries. With traditional export markets such as Japan and the United States still showing weak appetite for Philippine exports, new markets should be explored,” the NEDA official said.
But mineral products, which grew by 10 percent, and electronics, which grew by 11.6 percent, mitigated the decline in total outbound shipments for August.
Exports to East Asia, particularly Hong Kong, China and Taiwan, posted increases and exports to France and Switzerland continued to post double-digit growth rates, 78.1 percent and 68.6 percent, respectively. This cushioned the decline in receipts from other trading partners.
On pushing the country’s exports sector, Edillon urged to tap new markets such as Russia and Kazakhstan, which are being eyed as potential destinations for agriculture and industrial products. She also urged to tap emerging markets like Kuwait, Mongolia, and Malaysia.
“We also need to shift to high-value crops as potential agricultural exports. This can be done if we improve agricultural productivity through investments in modernization efforts, infrastructure, and research,” said Edillon.