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China urges deeper trade ties with Russia despite Western rebuke

China urges deeper trade ties with Russia despite Western rebuke

BEIJING – China on Tuesday urged increased cross-border connectivity with Russia and deeper mutual trade and investment cooperation, as both allies vowed ever closer economic ties despite disapproval from the West after Russian forces invaded Ukraine last year.

The Russian minister of economic development held “in-depth” discussions on economic cooperation with the Chinese commerce minister in Beijing on Tuesday, coinciding with a trip by China’s top diplomat, Wang Yi, to Moscow for strategic talks that led to the confirmation of Russian President Vladimir Putin’s visit to Beijing next month.

Chinese Commerce Minister Wang Wentao said in the Beijing discussions that Sino-Russian economic and trade cooperation had continued to deepen and become more “solid” under the “strategic guidance” of the two heads of state, according to a statement from his ministry.

With the war in Ukraine well in its second year and Russia under Western sanctions, Moscow has leaned on its ally Beijing for economic support, feeding on Chinese demand for oil and gas as well as grain.

In August, Chinese imports of Russian goods rose 3% from a year earlier to $11.5 billion, reversing a decline of 8% in July, the latest Chinese customs data show.

Beijing has rejected Western criticism of its growing partnership with Moscow in light of Russia’s war on Ukraine. It insists the ties do not flout international norms, and China has the prerogative to collaborate with whichever country it chooses.

On Tuesday, Group of Seven ministers reiterated its call, without naming any countries, on third parties to “cease any and all assistance to Russia’s war of aggression or face severe costs.”

The Russian Far East bordering China as well as North Korea has gained new strategic significance as a zone of cross-border trade and commerce.

Last week, Russia’s United Oil- and Gas-Chemical Co. and China’s Xuan Yuan Industrial Development agreed to build a transshipment oil complex near a railway bridge linking the Russian town of Nizhneleninskoye to China’s Tongjiang as Moscow diversifies its exports of commodities away from Europe, which it now deems politically “unfriendly”.

The Russian Far East, where about 70% of the country’s seafood is caught, also hopes to boost exports of its marine products to China after Beijing banned seafood from Japan due to the release of radioactive water from the wrecked Fukushima plant into the ocean.

Chinese state media also says there is a growing “necessity” for China and Russia to step up their grain trading amid continued tight global supplies. The construction of a grain corridor linking Russia to Heilongjiang, China’s northeastern bread basket, will help bolster China’s food security.

Earlier in September, Chinese President Xi Jinping declared that Heilongjiang should become a “pivotal” gateway for China’s opening up in the north, saying the province ought to play an active role in safeguarding national defense, food, and energy security. — Reuters

#China #urges #deeper #trade #ties #Russia #Western #rebuke

Peso seen to trade sideways ahead of rate-setting moves

THE PESO could trade sideways versus the dollar this week ahead of the rate-setting meetings by the US Federal Reserve and by the Bangko Sentral ng Pilipinas (BSP).

The local unit closed at P56.815 versus the dollar on Friday, weakening by five centavos from Thursday’s P56.765 finish, data from the Bankers Association of the Philippines’ website showed.

Week on week, the peso likewise fell by 18.50 centavos from its P56.63 close on Sept. 8.

The local unit opened Friday’s session at P56.78 per dollar, which was also its intraday best. Its weakest showing was at P56.90 against the greenback.

Dollars traded rose to $1.06 billion on Friday from $1.17 billion on Thursday.

The peso weakened against the dollar on Friday “after mostly stronger US retail sales and US producer price index (PPI) data that could support the higher-for-longer Fed rates narrative,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“[The] US dollar strengthened against most currencies [on Friday] following resilient US economic data,” a trader added in a Viber message.

The dollar index surged to a six-month high on Thursday as economic data was mostly stronger than expected, hitting the 105.43 level earlier in the day, its highest since March 9.

The index was on track for its biggest one-day percentage gain in just over a week, Reuters reported.

Retail sales rose by 0.6% last month. Data for July was revised lower to show sales advancing 0.5% instead of the previously reported 0.7%. Economists polled by Reuters had forecast retail sales gaining 0.2%. Retail sales are mostly goods and are not adjusted for inflation. They rose 2.5% on a year-on-year basis.

Meanwhile, the producer price index (PPI) for final demand rose 0.7% last month, the largest gain since June 2022, the Labor department said on Thursday. Data for July was revised slightly to show the PPI advancing 0.4% instead of the previously reported 0.3%.

Higher global crude oil prices recently and losses at the local stock market also dragged down the peso, Mr. Ricafort added.

Brent crude futures rose by 23 cents or 0.3% to settle at $93.93 a barrel, while US West Texas Intermediate futures were up 61 cents or 0.7% to close at $90.77 a barrel. Both contracts traded at 10-month highs on Tuesday for the fifth consecutive session and gained about 4% on a weekly basis.

Meanwhile, the benchmark Philippine Stock Exchange index (PSEi) went down by 82.06 points or 1.32% to end at 6,126.34 on Friday, while the broader all shares index dipped by 33.13 points or 0.99% to close at 3,320.18.

The PSEi on Wednesday sank to the 6,100 level due to concerns about US inflation. This was its lowest level in 10 months or since October 2022.

For this week, Mr. Ricafort said the peso could trade sideways ahead of the rate-setting meetings by central banks.

The Fed raised interest rates by 25 basis points (bps) last month, bringing its benchmark overnight rate to a range between 5.25% and 5.5%.

It has hiked rates by a cumulative 525 bps since it began its tightening cycle in March last year.

The Federal Open Market Committee will next meet on Sept. 19-20 to review policy.

Meanwhile, the BSP extended its policy pause for a third straight time at its Aug. 17 meeting, keeping the benchmark interest rate at a near 16-year high of 6.25%.

The central bank has raised borrowing costs by 425 bps from May 2022 to March 2023 to tame inflation.

The Monetary Board will next meet on Sept. 21 to review policy.

The trader said the peso is likely to remain below the P57-per-dollar level due to a potential intervention from the BSP.

The trader sees the peso moving between P56.50 and P57 per dollar this week, while Mr. Ricafort sees it ranging from P56.50 to P56.95. — Aaron Michael C. Sy with Reuters

#Peso #trade #sideways #ahead #ratesetting #moves

China, Venezuela sign agreements on economy, trade, tourism

BEIJING – Chinese President Xi Jinping and Venezuelan counterpart Nicolas Maduro have signed bilateral cooperation agreements in areas such as economy, trade and tourism, state broadcaster China Central Television (CCTV) reported.

The two nations also signed deals on science and technology, civil aviation and aerospace, CCTV reported on Wednesday.

The pair met during Maduro’s first visit to Beijing in five years against a backdrop of China’s testy relations with the West and energy and debt repayment talks. China is the world’s largest oil importer and oil-rich Venezuela’s largest creditor.

China and Venezuela have long-standing warm ties seen in China’s regular oil purchases despite US sanctions and financial support it bestows upon the cash-strapped Latin American country via loan-for-oil deals and investment.

China on Wednesday upgraded relations with Venezuela to an “all-weather strategic partnership”, typically reserved for a select few nations. The world’s second-largest economy is owed over $10 billion by Venezuela, independent data showed.

Xi said the two countries are “good friends with mutual trust” and common development, state media reported.

He also noted that next year will be the 50th anniversary of the establishment of the pair’s diplomatic relations.

Maduro said Venezuela supports China’s Belt and Road Initiative to boost trade infrastructure, Chinese media said, referring to a related conference in China next month. China has said it has Belt and Road cooperation agreements with more than 150 countries and over 30 international organizations.

He also said Venezuela is willing to closely communicate and cooperate with China within multilateral frameworks such as with the BRICS group and United Nations.

Venezuela is courting membership of BRICS – a group of major emerging economies Brazil, Russia, India, China and South Africa – which recently favored expansion.

A joint statement issued by China’s foreign ministry on Thursday stated that Venezuela is willing to join financial institutions and financing cooperation initiatives such as the New Development Bank set up by BRICS, and will continue to support the internationalization of the yuan.

Venezuela in the statement said, as a reliable supplier with the world’s largest oil and fourth-largest natural gas reserves, it can make important contributions to BRICS’ energy agenda.

China said it is willing to support construction of special economic zones in Venezuela and both countries agreed to further develop bilateral trade and “enrich the variety of trade goods”.

In the statement they also said agreements on aviation and aerospace include future flights between the countries and cooperation in spaceflight.

The countries also agreed to deepen cooperation between legislative bodies to strengthen exchanges on legislation and governance. — Reuters

#China #Venezuela #sign #agreements #economy #trade #tourism

F&B, nutraceutical innovations to take center stage at back-to-back trade shows in Bangkok

F&B, nutraceutical innovations to take center stage at back-to-back trade shows in Bangkok

A wide range of products and ingredients in the food and beverage, and nutraceutical industries can be sampled in Food Innovation (Fi) Asia Thailand 2023 and Vitafoods Asia 2023, which will be held from Sept. 20 to 22 at the Queen Sirikit National Convention Center (QSNCC) in Bangkok, Thailand.

Fi Asia Thailand 2023 has the reputation of being the primary meeting place for the food and beverage sector in Southeast Asia. Over 600 international exhibitors from more than 40 countries, alongside leading players, distributors, and key decision-makers, are expected to make the trip to Bangkok.

“Fi Asia Thailand 2023 is not just a trade show; it’s a thriving community dedicated to inspiring and fostering growth in the ASEAN food and beverage industry. With an array of opportunities to network, learn and collaborate, it is an unmissable event for anyone looking to make their mark in this sector,” explained Rungphech Chitanuwat, regional portfolio director for ASEAN and the new country general manager for the Philippines at Informa Markets and organizer of Vitafoods Asia 2023 and Fi Asia Thailand 2023.

Visitors at Fi Asia Thailand 2023 will get the opportunity to attend international conferences that will help participants discover innovative products and applications in the industry. There will also be technical presentations and an innovation zone which is dedicated to new ingredients. For those who are into beverages, a must visit is the Beverage Ingredients (Bi) Theatre.

Participants can also look out for the Sustainability Square where they can experience the authentic Thai delight called the Kanom Look Choup, a mung bean paste dessert that is used to be eaten only by Thai royalty, and how it can be created using mung bean flour and natural food colorants.

To be held simultaneously with Fi Asia Thailand is Vitafoods Asia 2023, Asia’s leading event for functional ingredients and dietary supplement products and solutions.

Nutraceutical products are considered one of the elements to maintain a sound body and mind or even combat specific diseases. The nutraceutical industry has been undergoing a remarkable transformation, driven by the growing emphasis on health and wellness, coupled with the unprecedented advancements in nutrition knowledge.

In Asia, the nutraceutical industry is expected to grow at a compound annual growth rate of 6% and attain a value of US$229 billion by 2023, according to reports from specialist agency Healthy Marketing Team.

“With more exhibit spaces, we are expecting more than 8,000 participants from around the globe to join the event. In addition to the product showcasing, Vitafoods Asia 2023 will allow participants to immerse themselves in a global hub of nutraceutical knowledge,” said Ms. Chitanuwat.

The event will feature insightful topics by renowned experts and successful entrepreneurs, sharing market trends, technical and product presentations, and tips and tricks for business — equipping attendees with new tools and knowledge in propelling their businesses forward.

Vitafoods Asia 2023 will also have resource centers on Omega 3 and Probiotics. Other attractions include Innovation Tours, International Pavilions that showcase the latest in nutraceutical products; New Ingredients and New Products Zone; NutraFocus and Tasting Bar.

“There will also be an ‘Innovative Health Hub’ that will showcase Asia’s top health and nutrition trends. You are all invited to join us and look into a world of innovation for a healthier tomorrow,” Ms. Chitanuwat said.

#FampB #nutraceutical #innovations #center #stage #backtoback #trade #shows #Bangkok

WTO warns against global trade split-up

WTO warns against global trade split-up

By Norman P. Aquino, Special Reports Editor

GENEVA — Geopolitical tensions and recent crises have spurred protectionist policies that are slowly eroding the world’s trading system and could ultimately fragment the global economy, the World Trade Organization (WTO) said, as it called for a renewed drive toward a broader and more inclusive integration.

In its annual Global Trade Report released on Tuesday, the world’s biggest economic organization said the tariff escalation between the US and China has slowed trade growth between them, while there have been signs of trade reorientation along geopolitical lines since Russia invaded Ukraine in February 2022.

Despite these challenges, international trade continues to thrive, and talk of de-globalization is on balance still far from supported by the data, Ralph Ossa, the WTO chief economist, told reporters at a news briefing in Geneva.

“We need to embrace trade instead of rejecting it if we want to overcome the most pressing challenges of our times,” he said. “The report makes the case for extending trade integration to more economies, to more people and to more issues — a process we call re-globalization.”

A strong multilateral trading system is the “best guarantor of economic security” because it provides the options needed when faced with supply shortages, Mr. Ossa said, citing the global coronavirus pandemic as an example.

In the report, the WTO said globalization must evolve in response to new challenges and needs to be accompanied by appropriate domestic policies.

“Re-globalization offers a better path forward,” WTO Director-General Ngozi Okonjo-Iweala said in the foreword of the 134-page report. “Bringing more countries and communities from the margins of the global economy to the mainstream would make for deeper, more diversified markets that are more resilient to shocks.”

Globalization — and WTO — critics have said the WTO’s consensus system needs to be replaced by a new negotiating model that meets 21st century problems including climate change, environmental destruction, low labor standards, human rights and corruption. They are also calling for bilateral and plurilateral deals to level the playing field.

“The WTO is concerned because the issue of trade and commerce has been politically tainted,” Philippine Chamber of Commerce and Industry President George T. Barcelon said by telephone before the WTO event. “Once it’s tainted, it will hold back actions that should come into play in the free market. The Philippines is having difficulty already in the supply chain especially during the coronavirus disease 2019 (COVID-19) pandemic. After that, some countries added another layer by weaponizing trade.”

This has especially affected the agriculture sector, which is heavily dependent on imported inputs such as fertilizer that comes from Russia, Belarus and Ukraine, where there is a war, he added.

“I am all for re-globalization, as long as the WTO can get people to follow the rules.”

In the report, the WTO noted that with security considerations becoming an increasingly influential factor in trade policy, some countries might reshuffle trade relationships due to tensions, but taking this too far would be counterproductive.

“The long-term evidence suggests that trade has contributed positively to peace among nations,” according to the report. “With regard to economic security, recent experiences with the COVID-19 pandemic, extreme weather events and the war in Ukraine have demonstrated how deep and diversified international markets help countries cope with unanticipated shortages by securing supplies from alternative sources,” it added.

Global trade flows have been resilient throughout past shocks, the WTO said, adding that trade costs keep falling as digital technologies facilitate international transactions and economies continue to sign integration deals.

The 164-member trade group admitted that there have been longstanding issues on its agenda, particularly agriculture, which accounts for a big employment pie in many member countries.

For one, trade costs in agriculture exceed those in manufacturing by 50%, penalizing poorer segments in society that rely on this sector.

Still, the WTO said it is already making a difference here — recent research found that its Trade Facilitation Agreement has had disproportionately positive effects on agricultural trade since it took effect in 2017, with least developed countries posting a 17% increase in agricultural exports as a result.

“Trade can be a powerful magnifying force of domestic competitiveness reforms, but in the absence of such domestic reforms, its role is limited,” Mr. Ossa separately told BusinessWorld in an e-mailed reply to questions. “That said, much remains to be done in the area of agricultural trade policy reforms.”

Trade costs in agriculture are 46% higher than in manufacturing, holding back agricultural exports around the globe, he said, citing the 2023 Global Trade Report. “While not all of this reflects policy barriers, it points to substantial unfinished business in multilateral trade negotiations.”

Mr. Ossa said de-globalization has not happened yet, noting that China remains the biggest trading partner for many economies including the Philippines.

He does not expect this to change soon. He noted that bilateral trade between China and the US reached a record $690.6 billion (P39 trillion) in 2022.

Mr. Ossa said trade was remarkably resilient during the COVID-19 pandemic, bouncing back to pre-pandemic levels less than a year after the first wave of lockdowns.

Trade in digitally delivered services remained strong all along, growing at an average annual rate of 8.1% between 2005 and 2022, outpacing goods (5.6%) and other services (4.2 %).

“But the warning signs must be taken seriously,” he said. “In the report, we looked at trade within and between hypothetical geopolitical ‘blocs’ constructed based on voting patterns in the United Nations General Assembly,” he said.

Goods trade flows between these “blocs” have grown by as much as 6% more slowly than within these ‘blocs’ since the onset of the war in Ukraine, indicating a shift toward friend-shoring, Mr. Ossa said.

“We also report an increasing level of trade concerns being raised about unilateral policies of trading partners at the WTO and the International Monetary Fund has reported a fragmentation of investment flows,” he said.

“All of this will eventually be reflected in reduced trade growth unless countries re-embrace multilateralism or re-globalization,” he added.

The WTO’s next trade forecast will come out in early October, “and it will be interesting to see what direction trade has taken since the spring.”

“Globalization never really went away, but in recent years it has been under serious scrutiny — partly due to international overdependence on China’s manufacturing prowess and the disruption in oil and gas trade due to Russia’s invasion of Ukraine,” said Arthur E. Appleton, a partner at Appleton Luff — International Lawyers and adjunct professor at the Johns Hopkins University School of Advanced International Studies.

Because of China’s actions in the South China Sea and its aggressive rhetoric toward Taiwan, Western countries are making efforts to onshore manufacturing and shorten supply chains, he said in an e-mailed reply to questions.

“Hopefully this is a temporary phenomenon. Despite globalization’s retreat, it remains important, particularly for the Philippines which is beginning to benefit from its various comparative advantages and continued integration into global supply chains,” Mr. Appleton said.

“The Philippines needs globalization to continue the development of its goods sector, and its increasingly important service sector. The rule-based trading system which is the backbone of globalization provides security to the Philippine business community and for Philippine economic development,” he added.

Mr. Appleton said it is in the Philippines’ economic interest to continue its integration into global supply chains despite challenges particularly in agriculture.

On the other hand, he said the WTO is stymied by its reliance on the consensus system.

“Getting 164 members to agree on anything is very difficult,” he said. “The WTO is also hampered by the US decision to block appellate body appointments. Without an effective dispute settlement system, it is more difficult to apply the rule of law when international trade disputes arise.”

Mr. Appleton said WTO members are likely to consider additional plurilateral alternatives to avoid blockages caused by the consensus system, and they need to resolve the dispute settlement impasse.

“The WTO is not perfect — far from it,” Ms. Okonjo-Iweala said in the report. “But the case for strengthening the trading system is far stronger than the case for walking away from it.”

She also said WTO members are acting to reinvigorate the organization, adding that today’s complex challenges require more, not less, international cooperation.

WTO members are actively looking at how to update and upgrade the group’s rulebook so that trade can contribute fully to effective responses.

The alternative to rules-based integration is power-based fragmentation and a world of greater uncertainty, increased socioeconomic exclusion and heightened environmental decline, Ms. Okonjo-Iweala said.

This year’s World Trade Report makes the case that “re-globalization” is a far more attractive alternative, she said, adding that policy makers should find it useful in shaping the future of trade “for peace, people and the planet.”

#WTO #warns #global #trade #splitup

PEZA sees trade deal helping South Korea climb FDI rankings

THE Philippine Economic Zone Authority (PEZA) said it expects South Korea to become a top-four source of foreign direct investment (FDI) after the recently signed free trade agreement (FTA).

“If they are currently number five right now, they might be number four,” PEZA Director General Tereso O. Panga said on the sidelines of a Philippine Information Agency briefing on Friday.

“If you look at the numbers, from January to September we saw a strong increase in Korean investment,” he said.

PEZA estimates that South Korean FDI in the January-Sept. 7 period was P1.41 billion.

Japan topped the list with P22.61 billion approved investments, followed by Singapore (P15.4 billion), the Cayman Islands (P11.63 billion) and the UK (P2.75 billion).

Mr. Panga said the FTA with South Korea is expected to drive increased FDI in electronics, agro-processing, renewable energy, automotive, and frontier technology.

Trade Undersecretary and Board of Investments managing head Ceferino S. Rodolfo said that the FTA, signed on Thursday, will correct tariff disadvantages hindering major Philippine exports to South Korea.

The Philippines was able to secure tariff elimination on 1,531 lines of agricultural goods, of which 1,417 lines will be removed upon entry into force (EIF) of the bilateral FTA.

Bananas, which are currently charged a 30% tariff, are set to go to zero tariffs over five years, while tariffs on processed pineapples, which are currently charged 36%, will obtain tariff elimination in seven years.

For industrial goods, the FTA led to tariff elimination for 9,909 lines, of which 9,747 lines are set for tariff elimination upon EIF.

Ateneo de Manila economics professor Leonardo A. Lanzona said in an e-mail that the FTA will likely lead to large domestic companies forging tie-ups with their Korean counterparts.

“It is crucial then also that the micro, small, and medium enterprises (MSMEs) are made to link with the domestic companies that are going to be tied to the multinational Korean companies,” Mr. Lanzona said.

“(The Korea FTA) is a welcome development. The more free trade agreements there are, the better,” he said.

“To maximize the benefits from these FTAs, we need to support more MSMEs and upgrade the skills of the workers to give them opportunities to participate in these activities,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the FTA will boost trade and FDI in the Philippines.

The Philippines can be positioned as “an alternative manufacturing hub as well as hedge (against disruptions of) the global supply chain for the international operations of South Korean global companies,” he said.

In turn, the FTA could also encourage the hiring of Filipino workers in South Korea, in view of improved economic ties, Mr. Ricafort said.

“Thus, the FTA will boost gross domestic product growth in view of the increase in external trade and investment,” he said.

He added that the agreement may also boost tourism from South Korea, already a leading source of visitors for the Philippines.

However, Ateneo’s Mr. Lanzona cited the need to amend the Constitution with the expansion of FDI to more industries.

“The Constitutional provision that limits foreign ownership of firms to 40% needs to be revised.  Greater flexibility in our trade agreements is needed as long as greater production with more and better jobs are achieved,” he said. — Justine Irish D. Tabile

#PEZA #sees #trade #deal #helping #South #Korea #climb #FDI #rankings

Peso may trade sideways

THE PESO could trade sideways against the dollar this week ahead of the release of US inflation data that could affect the US Federal Reserve’s next policy move.

The local unit closed at P56.63 versus the dollar on Friday, strengthening by 16 centavos from Thursday’s P56.79 finish, data from the Bankers Association of the Philippines’ website showed.

Week on week, however, the peso inched down by 3.50 centavos from its P56.595 close on Aug. 30.

The local unit opened Friday’s session at P56.74 per dollar. Its weakest showing was at P56.785, while its intraday best was at P56.56 against the greenback.

Dollars traded rose to $1.62 billion on Friday from $1.45 billion on Thursday.

The peso appreciated on Friday following the dollar’s slight decline in Asian trading, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For this week, the peso could move sideways against the dollar as the market awaits the release of August US consumer and producer inflation data, which could affect the Fed’s decision this month, Mr. Ricafort said.

The US central bank raised borrowing costs by 25 basis points (bps) last month, bringing its target rate to a range between 5.25% and 5.5%.

It has hiked rates by 525 bps since it began its tightening cycle in March last year.

The Federal Open Market Committee will hold its policy meeting on Sept. 19-20.

For this week, Mr. Ricafort expects the peso to range from P56.30 to P56.80 per dollar. — AMCS

#Peso #trade #sideways

Trade deficit shrinks to $4.2 billion in July

Trade deficit shrinks to $4.2 billion in July

The Philippines’ trade deficit further shrank in July as exports and imports continued to decline, data from the Philippine Statistics Authority (PSA) showed.

The PSA on Friday reported that the country’s balance of trade in goods stood at a $4.20-billion deficit in July, 30% lower than the $6-billion gap in July 2022.

However, the July trade gap was wider than the revised $3.94-billion deficit in June.

July saw the widest trade deficit in two months or since the $4.45-billion deficit in May.

The Philippines has incurred a trade deficit for the last eight years or since the trade surplus of $64.95 million in May 2015.

Merchandise exports fell by 1.2% to $6.14 billion in July, ending two straight months of growth. This was a reversal of the revised 0.9% growth in June but still lower than 4.2% decline in July last year.

July’s export level was the lowest in three months or since the $4.90 billion seen in April.

Meanwhile, imports slumped by 15.3% to $10.35 billion in July, slightly faster than the revised 15% decline in June and a reversal of the 22.3% growth in July 2022.

July marked the six straight month of a decline in imports.

For the January to July period, the trade deficit shrank to $32.18 billion from the $35.84-billion gap a year ago.

In the first seven months of the year, exports fell by 8.2% to $41.09 billion, while imports slipped by 9.1% to $73.27 billion.

The Development Budget Coordination Committee’s exports and imports growth assumptions are set at 1% and 2%, respectively, for this year.

Manufactured goods, which accounted for 82.4% of the country’s total export receipts, rose by 1.6% year on year to $5.06 billion in July.

Electronic products, which made up nearly three-fourths of manufactured goods and more than a half of total exports in July, grew by 7.7% to $3.65 billion.

Almost half of total exports came from semiconductors, which jumped by 18.2% to $3.03 billion.

The United States was the main destination of Philippine-made goods in July. Exports to the US stood at $1.04 billion, accounting for 16.9% of the total exports. Exports to Japan reached $862 million, while exports to Hong Kong stood at $798 million.

Meanwhile, orders of raw materials and intermediate goods in July dropped by 21.9% to $3.71 billion, which made up 35.9% of the total July import bill.

In July, imports of capital goods declined by 3.9% to $3.00 billion, while the imports of consumer goods grew by 5.9% to $2.07 billion.

Mineral fuels, lubricants and related materials fell by 34.4% year on year to $1.53 billion.

China accounted 25.5% of the total imports in July, with a value of $2.64 billion. It was followed by Japan with $865 million and Indonesia with $810 million.

University of Asia and the Pacific (UA&P) Senior Economist Cid L. Terosa said in an e-mail that trade in July was dampened by several external developments.

“They include the collapse of the Ukraine grain deal when Russia opted out, trade restrictions by China, India, and other major trading countries, unstable and weakening peso and, inflationary pressures that have curtailed production, distribution, and consumption activities around the world,” he said.

Mr. Terosa said it will be challenging for the Philippines to meet the trade growth assumptions since global trade is expected to remain weak.

“Also, downgrades to world economic forecasts by major international agencies point to punishing world market conditions ahead. Geopolitical tensions in Europe and Asia as well as rising petroleum prices can temper the usual upbeat global trade mood towards the end of the year,” he added.

Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. said in a telephone interview that geopolitical tensions affected the trade performance.

“Our supply chain was disrupted, there are trade constraints due to what is happening abroad. Some trading such as fuels, raw materials, and even basic consumables like rice are having problems, like a slowdown and some orders are being cancelled,” he said.

“I hope this will get better, otherwise, our projection of 6% to 7% growth at the end of the year might revised, at the most of 6%, or 5% or lower than 5%. August will be more or less the same, we are not sure if it slowdown a little or grow, but I think it will be materially difference” Mr. Ortiz-Luis said.

The Philippine economy expanded by a weaker-than-expected 4.3% in the second quarter, its slowest growth in over two years.

For the first half, gross domestic product (GDP) growth averaged 5.3%. However, GDP must expand by 6.6% in the second half to be able to achieve the government’s 6%-7% full-year target. — Lourdes O. Pilar

#Trade #deficit #shrinks #billion #July