December external trade in goods weakest in three years as exports, imports contract

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Trade activity in December marked its weakest in three years, as exports and imports both declined.

Preliminary results from the Philippine Statistics Authority showed merchandise exports declining 12.3% to $4.720 billion in December, slower than the 0.3% dip in November and a reversal of the 8.4% growth in December 2017.

The export decline in December was the biggest in 11 quarters when it registered a 13% decline in March 2016.

Likewise, imports contracted by 9.4% year on year to $8.473 billion during the month, a turnaround from the 6.8% growth in November and 25.9% growth in the same month in 2017.

The import decline was the first since July 2017’s 0.3% and was the largest in 3 years, or since December 2015’s -26%.

This brought the country’s trade deficit for December to $3.752 billion, narrowing from $3.972 billion a year ago.

Meanwhile, the country’s total external trade in goods – or the sum of export and import goods – shrank 10.5% to $13.194 billion. The December trade activity was the weakest in three years, or since the 15.15% plunge in December 2015.

To date, exports were down 1.8% to $67.488 billion, way off the two-percent target of the Development Budget Coordination Committee (DBCC) for full-year 2018.

On the other hand, imports grew 13.4% to $108.928 billion versus the DBCC’s nine percent projection for the year.

Cumulatively, the country’s trade balance posted a record-high $41.440 billion deficit in 2018 versus the $27.380 billion and $26.702 billion shortfalls in 2017 and 2016, respectively.

The United States is the Philippines’ top export market in December with a 16.4% share at $774.37 million followed by Japan’s 14.5% ($684.75 million) and Hong Kong’s 14% ($662.77 million).

Meanwhile, China was the country’s top source of imports with an 22.1% share ($1.87 billion) followed by Japan’s 9.7% ($826.05 million) and South Korea’s 9.2% ($775.56 million). — Marissa Mae M. Ramos