Photo:Pump prices drop in Tiaong Quezon
The trade deficit is expected to decline slightly next year, as the country continues to invest on infrastructure initiatives which bodes well for economic growth outlook, according to a leading bank’s economist.
“It might narrow a bit next year because oil prices will be lower. But we don’t expect investment spending to slow down because of both the public and private sector infrastructure initiatives,” Bank of the Philippine Islands (BPI) chief economist Emilio Neri Jr. said in an interview Thursday.
Neri cited recent estimates which reasonably assume that average global oil prices will rise modestly in 2019 compared to this year’s “unusual surge” of more than 40 percent.
He pointed out that a “still quite elevated” trade gap could push the current account position in deficit thus, there was still pressure on the peso.
Despite the wide trade gap caused by import surge, the government remains committed to implementing infrastructure projects under the “Build, Build, Build” (BBB) program, which it considers “high-priority” items.
The government has identified 75 priority infrastructure programs under the BBB program, most of which are roads, bridges and airports that are seen to help boost the economy, most especially in the far-flung communities of Mindanao.
Socioeconomic Planning Secretary Ernesto Pernia earlier said the country’s import payment are seen to remain elevated until 2019, primarily due to imports of capital goods and raw materials to sustain the government’s BBB infrastructure and manufacturing resurgence programs.
Government data indicates the country’s balance of trade in goods increased to USD 3.93 billion deficit in September 2018 from the USD1.75 billion during the same month last year. (PNA)