TRADE agreements in the Asean region and the forthcoming holiday season are likely to boost the country’s trade performance in the last quarter of the year, according to the National Economic and Development Authority (Neda).
Socioeconomic Planning Secretary Ernesto M. Pernia said the Asean Economic Community agreed to prioritize trade in goods and trade facilitation, which could boost the country’s chances of increasing its export and import growth.
The country’s total trade recorded a 2.3-percent growth in July 2017, higher than the previous month’s 1.5-percent growth. The Philippines trade deficit was also lower at $1.65 billion in July 2017, from the $2.37 billion posted in the same period last year.
“For the region, this means a chance to double intra-Asean trade by 2025. For the Philippines, this means strengthened economic ties with our neighbors and a chance to deepen our partnerships,” Pernia said.
One such agreement is the Regional Comprehensive Economic Partnership (RCEP) agreement, which, once approved, can account for 60.5 percent of the country’s trade. Asean accounts for 21.7 percent of the Philippines’s total trade.
RCEP includes the 10 Asean member-states and six free-trade agreement partners, which include China, Korea, Japan, Australia, New Zealand and India.
“This partnership may facilitate more exchange of goods and services, attract investments, create more jobs and improve the standard of living,” Pernia said.
University of Asia and the Pacific (UA&P) School of Economics Dean Cid Terosa agreed, saying the expected increase in the growth of the global economy will also spillover to the Philippines.
The last quarter of the year is also seen as the strongest quarter for economic growth for the Philippines mainly due to holiday spending. This is a key component in the economy, which remains a consumption-driven one.
“I believe that the trade performance will be better moving in the last quarter of the year. The strength of consumer demand worldwide in the last quarter of the year will propel trade growth,” Terosa said.
Merchandise trade grew to $12.2 billion, with a 10.4-percent exports growth offsetting the 3.2-percent decline in imports. Total trade from January to July 2017 grew to $87.8 billion, or 10.3 percent, compared with the same period last year.
For July, remarkable growth rates in exports were observed in Hong Kong (26.2 percent), Thailand (24.2 percent), South Korea (31.8 percent), Malaysia (31.6 percent) and Vietnam (16.4 percent).
For the same period, imports coming from the Asean region grew 8.5 percent, led by Indonesia (44.3 percent) and Vietnam (50.8 percent).