January exports decline – DBS

MANILA, Philippines — Exports likely contracted by 5.5 percent in January after a strong rebound last year, according to DBS Bank Ltd. of Singapore.

Gundy Cahyadi, economist at DBS, said the Philippines is seen posting a trade deficit of $3.9 billion in January after a record shortfall of $4 billion in December.

“Eyes are also on the trade data this week, following the multi-year high $4 billion deficit in December,” he said.

He said imports booked a faster growth of 15.7 percent in January.

“Robust investment growth will continue to support import growth going forward, while export growth may see some pullback this year, following a stellar year in 2017,” Cahyadi added.
Latest data from the Philippine Statistics Authority (PSA) showed the country booked a 19.5 percent increase in trade deficit to a record $29.8 billion last year.

Statistics showed exports rose 9.5 percent to $62.9 billion while imports grew at a faster pace of 10.2 percent to $92.7 billion.

For the month of December alone, exports declined 4.9 percent to $4.72 billion while imports jumped 17.6 percent to $8.74 billion.

“We continue to see a widening trade or current account deficit going forward,” he said.

The Bangko Sentral ng Pilipinas (BSP) sees exports and imports growing nine percent and 10 percent, respectively, this year.

It also sees revenues of the business process outsourcing sector rising 10 percent while remittances from overseas Filipinos increasing four percent.

As a result, the BSP said the Philippines would register a current account deficit of $700 million this year from the projected shortfall of $100 million last year.

After recovering strongly to the 50 to $1 level late last year, the local currency has weakened and breached the P52 level anew this year due to the impending rate hike by the US Federal Reserve this year as well as the projected current account deficit amid strong imports.