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Philippines imports soar 17pc and exports jump 14pc

THE Philippines trade deficit widened to US$2.8 billion in May, its highest level since 1980, according to data compiled by the Philippine Statistics Authority.

Exports rose 14 per cent year on year to $5.5 billion; while imports surged 17 per cent to $8.2 billion.

Import demand in the Philippines is rising as the government steams ahead with an ambitious infrastructure programme, boosting economic growth to six per cent, among the fastest in the world, reported Bloomberg.

As the nation's current account balance swings from a surplus to a deficit, that's removing a key support for the currency and the government's credit rating. With remittances also volatile, the peso has become Asia's worst performing currency this year and dropped to its lowest level against the dollar since 2006.

"The deficit widening is something that's really consistent with an economy that's powering ahead and doing very well," said Nomura Holdings economist Euben Paracuelles.

"The deficit will probably stay large and that would imply more pressures on the currency, more depreciation pressure on the peso over that period."

Electronics, led by semiconductors, remained the country's top export product, increasing 18 per cent in May from a year ago to $2.8 billion.

The biggest increases in imports came from metal products, which jumped 44 per cent, and transport equipment, which climbed 38 per cent.