December 14, 2021 | 00h00
MANILA, Philippines – Shipments out of the country may not be able to immediately salvage the country’s trade performance, which was already up to a weak start in the fourth quarter.
In its latest economic monitor, Pantheon Macroeconomics said October trade data gave a favorable start to the last quarter of the year.
In October, the Philippines posted its largest deficit in 33 months at $ 4.016 billion as imports continued to outpace exports.
While imports have maintained their upward trend since mid-2020, Pantheon’s senior economist for Asia, Miguel Chanco, said indications were that domestic demand was far from dynamic.
Inbound shipments continue to grow by more than 30%, although most of the increase from last year’s extremely weak base has faded.
âBut more than 80% of the growth in recent months has been due to imports of intermediate goods, raw materials and mineral fuels, mainly reflecting the resupply and surge in global commodity prices before Omicron,â Chanco said.
“Importantly, purchases of capital goods have shown a gradual downward trend since the second quarter, while those of consumer goods have remained stable,” he said.
Moreover, Chanco maintained that exports are unlikely to come to the rescue anytime soon, if the recovery in domestic demand were to disappoint.
Outbound shipments have slowed since April, with the Philippines retaining its underperforming position in the emerging Asian region.
âWe continue to believe this is due to the country losing market share in key industries, a structural trend that has arguably been accelerated by the pandemic,â Chanco said.
âThe country’s semiconductor exports have not really benefited from recent global shortages,â he said.
In 2016, semiconductor exports were equivalent to around 35 percent of Korea’s own chip shipments, but that share has declined by around 10 percentage points since.
Exports in October rose only 2% to $ 6.41 billion, weighed down by the basic electronics component which rose only slightly.
Dollar revenues from electronics, the country’s top export, rose 1.7% to $ 3.65 billion.