Trade deficit narrows to $3.3B in October
The global crude oil prices have already eased to among the lowest in nearly a year recently, or even lower since the start of the Russia-Ukraine conflict
The global crude oil prices have already eased to among the lowest in nearly a year recently, or even lower since the start of the Russia-Ukraine conflict
An economist said Tuesday that the country's narrowing trade deficit stabilized in October from the previous month and even strengthened the peso exchange rate.
Rizal Commercial Banking Corp. Michael Ricafort made the statement in an email report after the Philippine Statistics Authority said that the country's trade deficit for October 2022 narrowed by 13.5 percent to $3.3 billion in October from $3.82 billion in the same month of 2021.
A trade deficit meant that a country imported more goods from other countries than it exported. A trade surplus implied that a government sent out more goods than it brought in from other countries.
"The narrower trade deficit may have to do with the lower global crude oil prices at new lows in nearly a year recently, at $73 per barrel levels for the Nymex crude oil benchmark, and erased all the increase since the start of 2022 (vs. $75 in end-2021) and further below the $92 levels when Russia-Ukraine war started on 24 February 2022," Ricafort said.
He added that the near-record trade deficit a few months ago may have fundamentally contributed to the weaker peso in the earlier months of 2022. However, Ricafort said it is considered a "lagging economic indicator."
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He explained that the global crude oil prices have already eased to among the lowest in nearly a year recently, or even lower since the start of the Russia-Ukraine conflict.
Still, he said that imports and exports could continue to grow yearly in the coming months as the economy further reopens towards greater normalcy.
Trade deficit data
Even though the Philippines still had a trade deficit two months ago, PSA said the trade deficit grew by 54 percent, from $32.4 billion to $49.98 billion from January to October.
The two-way flow of goods was worth $18.9 billion in October, 12 percent more than the $16.6 billion a year earlier.
In October, export earnings jumped by 20 percent, from $6.4 billion to $7.7 billion.
Imports went from $10.4 billion to $11 billion, a 7.5 percent increase. This is only a third as fast as the 23.5 percent increase in October 2021.
