The country’s trade reported its largest deficit in five months for January due to a steep decline in exports, signaling a deteriorating trade balance that could put pressure on the peso.

Preliminary figures released on Tuesday by the Philippine Statistics Authority showed that the trade deficit in January increased by 27.2 percent to $5.74 billion from $4.5 billion in the corresponding month of last year, making it the largest monthly deficit since August’s record monthly deficit of $6 billion.

The January trade shortfall was greater than the estimated $4.3 billion deficit from ING Bank.

“The persistent trade deficit in the Philippines points to depreciation pressure for the Philippine peso in the near term,” ING senior economist Nicholas Mapa said.

In a separate tweet, Mapa said the wider trade deficit was one of the main reasons for PHL lagging the Asian foreign exchange rally in January.

The country’s imports had the steepest decline in almost three years, down 13.5 percent to $5.2 billion from a year earlier.

Trade gap data

The PSA said the country’s trade gap rose by 27.2 percent for the month, compared to the decline of 11.9 percent the previous month and the increase of 57 percent in January 2022.

Total external trade for the month hit $16.2 billion, down 2.4 percent, it said.

According to the Statistics bureau, the total export sales reached $5.23 billion, decreasing by 13.5 percent, while total imports grew 3.9 percent to $10.97 billion in January, according to PSA data.

Top export partners are Japan, the US, China, Hong Kong, Singapore, Thailand, Korea, Germany, Netherlands and Taiwan while imports were mainly from China, Indonesia, Jaan, Korea, the US, Singapore, Thailand, Malaysia, Taiwan and Vietnam, the PSA said.