Double-digit growth in trade traced to base effects
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HONORING HEROES Flags adorn the Tandang Sora National Shrine on Tuesday, June 11, 2024, in Tandang Sora, Quezon City, ahead of the celebration of the 126th Philippine Independence on June 12, 2024. This symbolic gesture is a tribute to Melchora Aquino, affectionately known as “Tandang Sora,” whose remarkable contributions during the Philippine Revolution included providing vital support like food and medical aid to the Katipuneros. NONOY LACZA
ESPITE the double-digit growth in exports and imports, economists attributed the country’s latest trade performance to base effects. On Tuesday, the Philippine Statistics Authority (PSA) said export earnings grew 26.4 percent while import receipts increased 12.6 percent in April 2024. The export growth was the highest since May 2021 when exports grew 30.9 percent while imports were the highest since the 14.4 percent growth posted in September 2022. “Trade data in the Philippines performed much better than what many had expected, with exports to the US, Japan, and Hong Kong leading the charge,” HSBC Asean economist Aris Dacanay told BusinessMirror
in an email. “The double-digit growth rate is partly flattered by base effects, with exports falling 20.3 percent year-on-year back in April 2023; we can expect exports to continue being positive in the months ahead,” he added.
Widening trade gap IN an economic brief, Rizal Commercia l Bank ing Cor poration (RCBC) Chief Economist Michael L. Ricafort said the growth in exports was not enough to keep the trade deficit from widening in April 2024. The data showed the balance of trade in goods (BoT-G), the difference between the value of exports and imports, amounted to $4.76 billion in April 2024.
This was the widest in five months or since the $4.77 billion recorded in November 2023. However, Ricafort said, this was still the narrowest in two years or since March 2022 when the deficit reached $4.46 billion. “[The trade deficit widened] amid the 26.4 percent year-onyear growth in exports [and] as the weaker peso made exports cheaper in international markets.” [This was] faster versus than the 12.6 percent year-on-year growth in imports at $11 billion, as the weaker peso made imports more expensive,” Ricafort said. Nonetheless, Dacanay said the country’s trade performance is expected to improve in the coming months. He noted that this can be observed in the recent Purchasing
Manager’s Index (PMI) of S&P Global Market Intelligence. S& P Globa l Ma rket Intelligence said the country’s PMI score slowed to 51.9 in May from the 52.2 index score in April. (See: https://businessmirror. com.ph/2024/06/04/phl-pmislows-in-may-factories-shedjobs/) Dacanay said the PMI in May still showed “some form of expansion across the board.” This also indicated demand for Filipino manufactured goods from abroad. “To boost exports further, the Philippines’ trade industry is reaching out to other trading partners in the hopes that they reduce their tariff rates for bananas, which is See “Growth,” A
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ANOTHER UPGRADE FOR PHL POSSIBLE–ANALYST I By Cai U. Ordinario @caiordinario
F the Philippines continues its growth momentum, Global Source Partners believes the country may again be primed for a credit ratings upgrade. If this happens, Global Source Partners Country Analyst Diwa Guinigundo said the country may have a chance of securing a BBB+ rating or even an A- rating. Fitch Ratings recently maintained the BBB credit rating of the Philippines with a stable outlook on the back of the country’s recent economic performance. (See: https://businessmirror. c o m .p h / 2 0 24 /0 6/ 10/ga i n s risks-as-f itch-af f irms-phlsratings/) “A stable outlook puts the burden of proof [on] the Philippines that its economic performance is more consistent and more reforms are underway. If it succeeds keeping the momentum of growth and reforms, an upgrade to BBB+ or even an A- is not an impossible dream,” Guinigundo said. Guinigundo said the latest ratings action of Fitch is signifi-
cant because while it recognized the resiliency of the Philippine economy, it also expressed its cautious optimism due to risks. He noted that Fitch expects the country’s growth to average 5.8 percent this year despite the “anemic growth” posted in 2023 of 5.5 percent. This, Guinigundo said, was due to “fading public expenditure” after the lockdowns. “It recognizes the economy’s resiliency despite the serious economic scarring of the pandemic a few years ago and the narrowing of the fiscal space,” Guinigundo said. “It also means the Philippines performed well in attaining respectable economic growth, moderating inf lation and mitigating some weaknesses in public finance,” he added. Guinigundo noted that Fitch See “Upgrade,” A
DA TOLD TO EDUCATE FISHERS, FARMERS DESPITE DEVOLUTION By Ada Pelonia @adapelonia
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HE Department of Agriculture (DA) is looking at strategies to effectively disseminate information to farmers and fishers even as agricultural extension has been devolved to local government units (LGUs). During a public hearing of the Committee on Agriculture, Food and Agrarian Reform on Tuesday, Senator Robin Padilla cited studies noting the lack of farmers’ awareness on the Rice Tariffication Law (RTL)
TIDES OF FREEDOM Alya Honasan, Mawen Ong and David Huang, including scuba instructor Nori Tolibas on board the Discovery Palawan, celebrate Independence Day underwater at Tubbataha Reefs Natural Park, located 150 km southeast of Puerto Princesa City. This symbolic gesture not only honors our nation’s heritage but also symbolizes our unwavering commitment to defending our sovereignty and underscores the importance of preserving the rich biodiversity of this UNESCO World Heritage site. DANNY OCAMPO
and insufficient aid from the government in information dissemination. “Ang kagawaran po ng agrikultura ay palagi pong katuwang ng ating mga magsasaka,” Agriculture Assistant Secretary and Spokesman Arnel de Mesa said, adding the department’s programs down to the farmer level through regional field offices, farmer cooperatives and associat ions (FC A), and the Agricultural Training Institute (ATI). However, de Mesa stressed See “DA,” A
PHL’s bid to exit FATF grey list for dirty money cited
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HE International Monetary Fund (IMF) has recognized the efforts of the Philippine government to be delisted from the grey list of the Paris-based Financial Action Task Force’s (FATF). IMF team leader in its recently concluded mission to the Philippines Elif Arbatli Saxegaard said they were happy to see that the country had an “all-hands-ondeck approach” to getting out of the grey list. In February 2024, the FATF decided to keep the Philippines in its grey list pending the country’s deliverables such as demonstrating that anti-money laundering and combating financing of terrorism controls are being used in casino junkets,
among others. (See: https://businessmirror.com.ph/2024/02/26/ fatf-notes-phls-progress-butkeeps-it-on-its-grey-list/) “They [national government] are really committed and I think they are making significant progress. It’s hard for us to know what the FATF will decide, so it’s not up to us to speculate on that,” Saxegaard said. “But our hope is that the Philippines gets off the list, building on this reform process that they’ve already initiated.” Saxegaard said a whole-ofgover nment approach, which involved several agencies and institutions working together, See “FATF,” A
PESO EXCHANGE RATES Q US 58.7690 Q JAPAN 0.3743 Q UK 74.8129 Q HK 7.5227 Q CHINA 8.1083 Q SINGAPORE 43.4586 Q AUSTRALIA 38.8463 Q EU 63.2825 Q KOREA 0.0428 Q SAUDI ARABIA 15.6713 Source:
BSP 11 June 2024