RP posts first trade surplus in 14 months in Feb

The country posted a trade surplus for the first time in 14 months in February after electronics manufacturers and other exporters shipped more than previously estimated by the government.

The $88 million surplus, the largest in 2 1/2 years, compared with a revised deficit of $354 million in January, the National Statistics Office (NSO) reported yesterday.

Imports rose 4.6 percent from a year earlier to $3.358 billion. Exports climbed 14.8 percent to a revised $3.445 million, beating the government’s April 11 estimate of $3.295 billion.

For the first two months of the year, imports were up 4.8 percent to $7.04 billion while exports grew 7.5 percent to $6.77 billion to give a deficit of $266 million.

The two-month deficit, according to the NSO, was an improvement from the $418 million trade shortfall recorded in the same period last year.

The government is relying on export growth of as much as eight percent this year to spur the local economy.

A trade surplus should also boost the peso, which has fallen 1.3 percent in the past month.

"This is an encouraging sign that exports will remain on an uptrend, which should contribute to a reasonable economic growth," said David Cohen, an economist at Action Economics in Singapore. "This is one less pressure on the peso and will contribute to its underlying stability."

The last time Philippine exports exceeded imports was in December 2004, when the nation had a $13 million trade surplus.

Gains in exports, which account for about two-fifths of the economy, slowed in 2005 to 3.9 percent from 2004’s 10 percent increase.

Cohen expects exports to expand 9.5 percent this year and the country to post a $3 billion trade deficit, less than 2005’s revised $6.16 billion.

The United States was the country’s main source of imports in February, cornering 17.1 percent of the market. However, this is a 9.2 percent deceleration during the same period of 2005. Japan followed with 15.7 percent share, and Singapore with the third biggest share at 8.7 percent.

In February, the Philippines bought more crude oil and machinery from abroad, offsetting a decline in computer parts and other electronic goods, the NSO said.

Purchases of fuel and related materials rose 24 percent to $524.8 million and those of capital goods increased 8.8 percent to $1.2 billion. Imports of raw materials fell 3.3 percent to $1.3 billion and those of consumer goods declined 5.7 percent to $246.4 million.

Imports of electronic goods fell 1.1 percent to $1.6 billion, the report said. Falling purchases of electronic goods, which are used to manufacture disk drives and cell-phone chips for exports, may make it harder for the government to achieve this year’s exports growth estimate.

Electronic goods account for 67 percent of local exports.

"I don’t think the February trade surplus indicates that the trade position has been reversed," said Christy Tan, a Singapore-based economist at Bank of America. "This could be the last surplus for the year.’’

The Philippines had a $266 million trade gap in the first two months of the year, less than the $418 million deficit posted a year earlier.