November 7, 2018 / 2:42 AM / 9 months ago

UPDATE 1-Philippines' record-high Sept imports widen trade deficit

* Sept trade deficit hits nearly $4 bln

* Imports at record high level of $9.75 bln

* Exports down after 3 months of modest rises (Add details, milestones, analyst comment)

MANILA, Nov 7 (Reuters) - Philippine imports hit an all-time high in September while exports remained weak, bringing the trade deficit to the highest in nine months amid sustained purchases of capital goods needed for the government’s infrastructure overhaul.

Imports in September rose 26.1 percent from a year earlier to a record $9.75 billion, the Philippine Statistics Authority (PSA) said on Wednesday, a day before the release of third-quarter GDP data.

Exports fell 2.6 percent to $5.83 billion in the month after three consecutive months of modest increases averaging about 2 percent.

The trade deficit in September hit $3.93 billion, marking the sixth straight month that the gap stayed well above $3 billion.

The Southeast Asian country’s trade deficit in January-September ballooned to $29.9 billion, compared with the $17.5 billion deficit in the same period last year, the data showed.

Government spending on infrastructure probably helped the domestic economy expand at a faster clip in the third quarter from a year earlier, based on the median 6.3 percent growth estimate in a Reuters poll of analysts.

Weak exports, however, along with soaring consumers prices, have made it difficult for the government to hit its original GDP growth target of 7-8 percent for this year.

“Robust import growth reflects a healthy and burgeoning economy moving into a higher growth path, but exports remain the missing link to the new Philippine growth story,” said Nicholas Mapa, senior economist at ING.

Last month the government shaved its growth target to 6.5-6.9 percent, and at the same time raised its inflation forecasts for this year and next.

Among the country’s top imports in September were iron and steel, growing nearly 50 percent from a year earlier, and industrial machinery and equipment, up 17.3 percent. Electronics imports grew 29.5 percent.

While the infrastructure investment bodes well for the domestic economy in the long term, economists have said the wide trade gap would continue to pressure the Philippine peso, which has been hovering near 13-year lows against the U.S. (Reporting by Enrico dela Cruz and Karen Lema; Editing by Gopakumar Warrier)

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