Philippines

Soaring global oil prices pushed import growth to 19.7% y-o-y in December from 12.7% in November, leaving the country with a trade deficit of US$528mn for the month after fuel imports rose 90.6% y-o-y. This took the Philippines' full-year trade deficit for 2007 to US$5.04bn, or 5.7% of GDP, a slight narrowing from 2006 when the trade balance came in at 5.8% of GDP. However, we are expecting the trade deficit to widen in 2008 as exports slow on the back of a weaker external environment and a stronger peso, while import growth concomitantly continues to accelerate.

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