MANILA, Philippines – Despite economic managers’ confidence that a weak peso would improve the country’s exports, the Philippines posted a wider trade deficit in June.
The Philippine Statistics Authority (PSA) said on Wednesday, August 8, that total exports sagged by 0.1% in June to $5.700 billion from $5.704 billion in the same month a year ago. Imports rose to their fastest at 24.2% to $9.05 billion.
The country’s trade gap in June was at $3.35 billion, higher than the $1.59 billion in the same month last year. The trade gap is slightly narrower than May’s $3.7 billion.
The peso’s year-to-date average is at P52.23. As of writing, the peso traded against the United States dollar at P53.07, still among Asia’s worst performing currencies.
In theory, a weak peso would boost the country’s exports since cheaper goods and services encourage other countries to buy. Meanwhile, importing from other countries with a weak currency would be more expensive.
A trade deficit could also mean that consumers are wealthy enough to purchase more goods than what the country produces. Imports from other nations increase when production cannot meet demand.
Mineral products (-56.6%); chemicals (-34.3%); ignition wiring sets used in vehicles, aircraft, and ships (-23.7%); and banana (-2.4%) were among the biggest losers among the country’s top exports.
Coconut oil (15.7%) continued to top the list of Philippine exports.
The country imported more iron and steel (79.1%); cereals and cereal preparations (57.1%); electronic products (35.1%); mineral fuels (32.5%); and transport equipment (27.8%). – Rappler.com
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