Philippine trade deficit widened by 109.7%; total trade up 39.9 in May —PSA

The Philippines’ trade in goods deficit widened by over 100% in May as imports continue to outgrow exports, a sign that global trade is recovering from the COVID-19 pandemic, data released by the Philippine Statistics Authority (PSA) showed Friday.

Preliminary data from the PSA showed that the balance of trade in goods posted a deficit of $2.755 billion in May, up 109.7% from $1.314 billion in the same month last year.

The trade gap during the period is narrower compared to the $3.085 billion deficit recorded in April.

A deficit indicates that the value of a country's imports exceeded export receipts, while a surplus indicates more export shipments than imports.

Total external trade, the summation of imports and exports, stood at $14.541 billion, up 39.9% from $10.4 billion in May 2020.

Imports accounted for 59.5% of the total external trade value while 40.5% were exports.

Exports

In particular, exports amounted to $5.89 billion, up 29.8% year-on-year. This is also a reversal from the 26.7% decline experienced in May 2020, the height of strict lockdowns due to COVID-19 pandemic.

"We are very optimistic that we can sustain this upward exports performance trajectory as our major trading partners continue opening up their borders and easing travel restrictions, given the success rate in their vaccination drive The same thing here in the country as we rollout the vaccination program and allowed 100% operating capacity even during the Enhanced Community Quarantine (ECQ) and Modified ECQ (MECQ) months of March and April of this year," Trade Secretary Ramon Lopez said in a separate statement.

Data from the PSA showed electronic exports continue to be the Philippines’ top exports with a 61.3% share to total exports, which grew by 22.3%.

The Trade chief said that the growth in exports is an indication of the gradual recovery of the consumer market as more people resume their lives interrupted by the pandemic.

By major trading partner, exports to China comprised the highest export value amounting to $954.28 million or a share of 16.2%  to the total exports during the month.

Completing the top five major export trading partners of the Philippines are the following:

• United States of America (USA), $918.11 million (15.6%)
• Japan, %829.01 million (14.1%)
• Hong Kong, $792.05 million (13.4%)
• Singapore, $324.95 million (5.5%)

Imports

Imports, meanwhile, amounted to $8.65 billion, up 47.7%. The growth in imports is also a reversal from the 40.5% decline posted in May 2020.

“The annual increment of imported goods in May 2021 was due to the increase in nine of the top 10 major commodity groups which was led by mineral fuels, lubricants and related materials (301.6%). This was followed by iron and steel (111.3%); and miscellaneous manufactured articles (80.4%),” the PSA said.

China was the country’s biggest supplier of imported goods valued at $2.21 billion or 25.6% of the total imports in May.

Completing the top five major import trading partners of the country with their corresponding import payments and percent shares to the total imports were:

• Japan, $758.91 million (8.8%);
• Republic of Korea, $615.09 million (7.1%);
• Indonesia, $601.04 million (6.9%)
• USA,  $584.84 million (6.8%).

The Department of Trade and Industry (DTI) said that global trade is expected to further rebound in the second quarter according to the United Nations Conference on Trade and Development’s outlook for 2021, but largely dependent on subsiding pandemic restrictions.

“The UN agency expects the fiscal stimulus packages, particularly in developed countries, to strongly support the global trade recovery throughout 2021. Sectors expected to maintain growth include pharmaceuticals, communication and office equipment, minerals, and agri-food,” the DTI said. -MDM, GMA News