Trade gap highest in 8 mos at $4.87B in July
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PROTESTERS DEMAND END TO SECRET FUNDS AND PORK BARREL POLITICS As the House of Representatives resumed its budget hearing for the Vice President’s office, protesters from a militant group gathered outside, holding placards demanding the abolition of confidential and intelligence funds as well as all forms of pork barrel spending. Their rally highlighted frustrations over Vice President Sara Duterte’s stance during the previous hearing. NONOY LACZA
HE country’s trade deficit posted a double-digit increase in July, the highest in eight months, according to the Philippine Statistics Authority (PSA). Based on the latest International Merchandise Trade Statistics of the Philippines, the country’s trade deficit widened by 18 percent in July 2024, the fastest increase in the trade gap since the 30.6 percent growth in November 2023. In absolute terms, the trade deficit expanded to $4.87 billion in July. As of July 2024, PSA said the total trade deficit of the country reached $29.91 billion. “In June 2024, the trade deficit
recorded an annual increment of 9.8 percent, while an annual decrease of 31 percent was registered in July 2023,” the PSA added. R iza l Commercia l Bank ing Corporation Chief Economist Michael L. Ricafort said the absolute amount of the trade deficit was also the largest since March 2023 when the deficit reached $5.018 billion. “[This] largely ref lected the faster growth in imports, which are also the highest in more than a year or since March 2023 amid the further recovery of the economy with no more Covid restrictions for more than a year already or since July 22, 2023,” Ricafort said.
“[The] stronger peso exchange rate made exports more expensive from the point of view of international buyers, thereby resulting in the slower year-on-year growth in exports,” he added. The wider trade deficit was mainly due to lower exports compared to imports in July 2024. Exports posted a growth of 0.1-percent growth while imports grew 7.2 percent. The country’s total exports amounted to $6.25 billion in July 2024 and was at $42.66 billion in the January to July period this year. PSA said that total export sales contracted 17.3 percent in June
2024, while a 0.1 percent growth was recorded in July 2023. Imports, meanwhile, amounted to $11.12 billion in July 2024 and reached $72.57 billion in the January to July period this year. In June 2024 and July 2023, the import value recorded contracted 7.3 percent and 15.1 percent, respectively.
Products
IN terms of products, PSA data showed shipments of electronic products to and from other countries dominated the country’s exports and imports in July 2024. See “Trade gap,” A2
A broader look at today’s business
FDI INFLOWS DECLINE TO 4-YR LOW IN JUNE www.businessmirror.com.ph
n Wednesday, September 11, 2024 Vol. 19 No. 330
P25.00 nationwide | 2 sections 22 pages | 7 DAYS A WEEK
By Cai U. Ordinario @caiordinario
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OB-GENERATING investments from abroad fell to its lowest level seen at the height of the Covid-19 pandemic four years ago, according to the latest data released by the Bangko Sentral ng Pilipinas (BSP). Data from the BSP showed Foreign Direct Investments (FDIs) reached $394 million in June, the lowest since April 2020 when FDIs averaged $314 million. The FDI level in June 2024 was 29 percent lower than the $555 million net inflows recorded in June 2023. Nonresidents’ net investments in equity capital contracted 33.2 percent to only $74 million. “The prevailing environment of high borrowing costs has affected, I believe, global investment in general,” Unionbank Chief Economist See “FDI,” A2
SMOKE SIGNALS: WAGE HIKE ON THE HORIZON In a snapshot of Manila’s diverse workforce, a tinapa maker (left) and a welder (right) illustrate the wage disparity among non-agricultural workers. The National Capital Region-Tripartite Wages and Productivity Board Wage Order NCR-25, issued on June 27, 2024, increased the minimum wage for non-agriculture workers from P610 to P645. For agriculture workers, small service and retail establishments, and small manufacturing firms, wages rose from P573 to P608. As of September 4, 2024, Labor Secretary Bienvenido Laguesma announced that workers in regions outside Metro Manila may soon see a raise in their daily wages, aligning with President Ferdinand R. Marcos Jr.’s directive for regional wage reviews. BERNARD TESTA
PHL’S INNOVATION OUTPUT RISING, YET PROGRESS LAGS By Bless Aubrey Ogerio
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HE Phi l ippines has shown impressive innovation output despite limited resources, but progress in improving the quality of life remains slow, Ria Liza Canlas of the National Innovation Council told the third National Agri-Aqua Technology Business Incubation Conference and Incubatee Summit at SMX Convention Center Clark on Tuesday. “You could see that the PH is above this straight line
because there is seemingly a straight relationship between output and input. Filipinos seem to be very resourceful in such a way that they come up with many outputs compared with very limited input. That’s a mindset,” she said. In 2022, the Philippines ranked fifth in the Global Innovation Index (GII), which evaluates how countries perform in terms of innovation performance. However, it lags significantly behind regional See “Innovation,” A2
Amro: Devt risks curb PHL bid for long-term growth
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HE Philippines continues to be saddled with development constraints that prevent it from posting long-term sustainable economic growth, according to the Asean+3 Macroeconomic Research Office (Amro). In a statement after its Annual Consultation Visit to the Philippines, Amro said these risks were recently discussed withthe Bangko Sentral ng Pilipinas (BSP) and the Department of Finance (DOF). These are expected to persist even if the economy is expected to grow by 6.1 percent this year and 6.3 percent next year, while inf lation will trend downward to 3.3 percent in 2024 and 3.1 percent in 2025.
“The country’s long-term potential growth could be constrained by insufficient infrastructure investment, vulnerabilities to climate change, and the prolonged scarring effects caused by the Covid-19 pandemic,” Amro said. Other vulnerabilities of the Philippines in the near-term were higher inflation, particularly from expensive food prices. This could dampen consumption in the country leading to slower GDP growth. Amro said the country’s growth could also be threatened by the slowdown in the United States, Euro area, and China which are among the top trade partners of See “Amro,” A2
PESO EXCHANGE RATES n US 56.2950 n JAPAN 0.3933 n UK 73.6113 n HK 7.2201 n CHINA 7.9131 n SINGAPORE 43.1346 n AUSTRALIA 37.4981 n EU 62.1384 n KOREA 0.0421 n SAUDI ARABIA 14.9996 Source:
BSP (10 September 2024)