The National Economic and Development Authority said Philippine trade grew for a fourth consecutive month in July 2018, the fastest since January 2018.
The Philippine Statistics Authority recently reported that the country’s total trade grew by 17.5 percent, reaching USD15.2 billion in July 2018.
This growth was buoyed by a hefty increase in imports, which grew by 31.6 percent, and a slight positive outturn in exports at 0.3 percent in July 2018.
“As the global trade situation becomes less encouraging, improving the overall climate for export development becomes all the more indispensable. Thus, the government needs to fast track the crafting of the Ease of Doing Business Act’s implementing rules and regulations,” said Socioeconomic Planning Secretary Ernesto M. Pernia.
From January to July 2018, total merchandise trade reached almost USD100 billion, 7.7 percent higher than the same period in 2017. This can be attributed to the 15.7 percent cumulative growth in imports, making up 61.2 percent of total trade.
Merchandise imports grew by nearly a third, driven by import of capital goods, raw materials and intermediate goods, which posted hefty growth, indicating continuing investment for higher productivity.
Exports continued its recovery, albeit minimally, as forest and mineral products propped up total exports growth.
However, the World Trade Outlook Indicator points toward a continued slowdown in trade in the third quarter. The slowdown in activity is attributed to rising trade barriers, moderating growth in China, higher energy prices, and elevated policy uncertainty.
Moreover, the bilateral trade war between the US and China has resulted in a growing coverage of tariff levies throughout the year, with both countries already imposing additional 25 percent tariff on USD50 billion worth of goods each.
“Trade war fears have weighed on business sentiment, and we now see softer global activity. With a resolution unlikely in the short term, the dispute is expected to dampen growth in both economies and drag down growth in the wider global economy,” the Cabinet official said.
To boost exports, Pernia said there is a need to promote forward and backward linkages. This is through projects such as the Agribusiness Support for Promotion and Investment in Regional Expositions or ASPIRE, which integrates marketing development support services to farmers, fisherfolk, and MSMEs, and linking exporters to sources of export financing.
He added that the high cost of domestic and international shipping and cargo handling also needs to be addressed.
“Addressing costs of trade will ensure that imported goods, especially capital and intermediate products, are less expensive and are efficiently utilized in the country’s Build, Build, Build program,” he said.
Pernia further noted that the deterioration in the global economic environment underlines the importance of ensuring domestic economic fundamentals remain strong.