Trade balance still in deficit despite rise in exports

By Czeriza Valencia (The Philippine Star) | Updated October 11, 2017 - 12:00am

MANILA, Philippines Exports extended their growth trajectory for the ninth consecutive month in August, driven by
double-digit growth in shipments to ASEAN, EU and other Asian trade partners, the Philippine Statistics Authority (PSA)
said yesterday.

In its report on the countrys trade balance, PSA said exports rose 9.3 percent to $5.51 billion during the month from
$5.04 billion last year.

At the same time, PSA said increased inbound shipments of capital goods led imports to grow at a faster 10.5 percent to
$7.92 billion in August from $7.17 billion in the same period last year.

As imports still outpaced exports during the reference period, the country still incurred a trade deficit of $2.41 billion,
up from $2.13 billion last year.

PSA said seven out of the top 10 major export commodity groups registered significant growth in August. These were:
gold (186.7 percent), machinery and transport equipment (75 percent), electronic equipment and parts (71.3 percent),
coconut oil (61.2 percent), metal components (22.6 percent), other manufactured goods (13.8 percent) and electronic
products (3.5 percent).

For inbound shipments, nine out of the top 10 major import commodities registered growth in August. These were:
metalliferous ores and metal scrap (718.0 percent); organic and inorganic chemicals (27.6 percent); mineral fuels,
lubricants and related materials (23.8 percent); telecommunication equipment and electrical machinery (11.3 percent);
iron and steel (10.9 percent); other food and live animals (9.7 percent); electronic products (8.3 percent); industrial
machinery and equipment (6.2 percent) and transport equipment (2.2 percent).
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Most of the countrys imports came from China, US, Indonesia, Thailand, Singapore, Taiwan, Malaysia and Germany.

Meanwhile, double-digit growth in export receipts were recorded from trade partners in Asia such as Hong Kong (21.9
percent), Thailand (29.5 percent) and South Korea (33.7 percent). Increased exports to Germany (10.5 percent), and
the Netherlands (34.5 percent) were also registered.

By economic bloc, the bulk of the countrys merchandise exports in August went to countries in East Asia, accounting for
48.1 percent share of total exports valued at $2.65 billion. It rose 2.8 percent from $2.58 billion in August 2016.

National Economic and Development Authority Undersecretary Rolando Tungpalan said trade can be enhanced further if
the countrys potential in digital trade and e-commerce can be tapped.

To help enhance this trade productivity, it is important to follow through with reforms that will develop the countrys
potential in digital trade and e-commerce, he said.

An example is the Philippine Customs and Trade Facilitation Project, a $200-million World Bank-financed modernization
plan for the Bureau of Customs (BOC).

This can boost BOCs efficiency, effectiveness, transparency, and revenue collection through an updating of systems,
procedures, and operational activities related to processing and clearance of imported and exported goods.
Japan needs Indians: When Modinomics and Abenomics come to help each other
ECONOMICTIMES.COM|
Oct 13, 2017, 04.32 PM IST

Both Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe are known for their distinctive economic
policiesModionomics and Abenomics. They also share great chemistry as is evident from India and Japan joining in
several fields such as transport and defence.

India and Japan are at totally different economic stages. A developed economy, Japan has been plagued by low growth
for a long time which Abe is now trying to speed up.

India is a developing economy that has to focus on manufacturng to retain high growth rates and generate jobs for its
pre-dominantly young population.

The biggest task for Abe when he came to power in 2012 was to revive the stagnated Japanese economy. Abenomics is
how he planned to do that. Abe's steps included government spending, monetary easing and economic reforms.

A big challenge for Abe has been Japans aging population. For nearly a decade, the working-age population has been
declining and is down about 13 per cent.

Modinomics, the economic polices of Prime Minister Narendra Modi, are focused on India's demographic dividend.
Most of India's population is young and Modi has to provide them jobs. Job growth is down because private investment
is down. Modi's ambitious 'Make in India' programme that aims to generate jobs, needs foreign investment. Modi's
economic reform agenda is aimed at creating a better business atmosphere for foreign investors.

Briefly, India and Japan are opportunities for each other. That's why Japanese investment in India has grown rapidly
after Modi came to power.

Being at different economic stages, India and Japan can complement each other in many ways. Japan looks to boost its
investment and has cutting-edge technology to share while India needs both. Thats how the bullet-train project came to
happen.

Now they are trying to help each other in another way. India is planning to send three lakh youth to Japan for on-job
training for three-five years as part of the government's skill development programme. Japan will bear the financial cost
of the skill training of Indian technical interns. About 50,000 of them may also get jobs in Japan .The Union Cabinet has
approved signing of Memorandum of Cooperation between India and Japan on the Technical Intern Training Program
(TITP), according to the according to the skill development minister Dharmendra Pradhan .

Most of India is young and needs jobs but there arnt adequate opportunities as private investment is not picking up.
Japan is aging and needs more work force. And, of course it has a lot of know-how to impart. Abenomics and
Modinomics can surely come together for mutual benefit.
World Bank cuts Philippine GDP forecast again
Published 9:05 PM, October 04, 2017 Rappler

MANILA, Philippines The World Bank lowered its projections for the Philippines' economic growth once again, due to a
spending program that has been slow out of the gates.

In its East Asia and Pacific Economic Update October 2017 released on Wednesday, October 4, the multilateral
institution downgraded the Philippines' gross domestic product (GDP) forecast to 6.6%, from the 6.8% it forecast last
July which itself was down from the 6.9% projected back in April.

The World Bank also lowered the Philippines' GDP forecast for 2018 to 6.7%, from 6.9% in July.

The Philippine economy grew by 6.4% in the 1st half of 2017, with growth in the 2nd quarter picking up from the slow
growth at the start of the year.

"The Philippine economy had a slower start in 2017 compared to 2016, when government's election-related spending
and front-loaded private investment fueled growth in the 1st half of the year," the World Bank said in its report.

"In 2017, the economy is projected to expand at a slightly slower pace than 2016, at 6.6%. The delay in the anticipated
push of the planned government infrastructure program has been contributing to the moderation of fixed capital
formation growth, softening the growth prospect for the year."

The government's P9-trillion infrastructure spending program, called Build, Build, Build, failed to push the economy in
the 1st quarter of 2017, although it started to make its presence felt in the 2nd quarter, along with a recovering
agriculture sector.

The country's economic managers are also pushing for stronger revenue-generating measures for the Senate version of
the tax reform bill, which is seen as critical to generating the funds needed to boost infrastructure spending.

Outlook still positive

Despite the latest cuts, the World Bank maintained that the medium-term outlook for the Philippines remains positive.

"Growth is expected to be anchored on its main trading partners which would lead to higher external demand, while
imports would remain elevated due to necessary imports of intermediate and capital goods, including for the
infrastructure program," the World Bank said.

The Washington DC-based institution noted that as public infrastructure spending gains traction, capital outlays and
construction activities are expected to rise. Consumption, the economy's main driver, is also expected to remain firm
amid sustained remittances and expanding credit contributing to improving income levels.

The World Bank added that "local elections in 2019 will likely boost domestic activities as early as the latter half of
2018."

It also projected that poverty in the country, based on the lower middle-income class line, would decline to 22.9% in
2018.

"The pace of poverty reduction may drop slightly in the face of slightly lower overall growth," the World Bank said, "but
poverty is expected to continue to fall as the economy continues its structural transformation."

Last month, the Asian Development Bank (ADB) retained its GDP forecast for the Philippines at 6.5% for 2017 and 6.7%
for 2018. Rappler.com