Metro Manila (CNN Philippines, August 7) — The Philippines saw a narrower trade deficit in June as it imported fewer goods compared to last year, latest data showed.
Imports fell by 10.4 percent to $8.48 billion in June, marking the steepest drop so far this year as the country scaled back its purchases of foreign-made items, the Philippine Statistics Authority (PSA) reported on Wednesday. This reversed a 29.9 percent increase in June 2018, when total imports were valued at $9.47 billion.
On the other hand, the country sustained three straight months of an export rebound. Local manufacturers saw outbound shipments rise by 1.5 percent to $6 billion in June, the fastest pace since October.
As a result, the trade balance settled at a $2.47 billion deficit, the narrowest in over a year. For the first semester, the trade gap ended at $19 billion, narrower than the $19.235 billion incurred during the comparable period in 2018.
Exports of electronic products — the country’s top export item — grew 4.3 percent year-on-year, PSA said. It is valued at $3.54 billion and accounts for 59 percent of total exports.
Cathodes and refined copper saw outbound shipments surge by 41.7 percent, followed by fresh banana exports which climbed by 24.4 percent. Other top export items were vehicle wiring sets, gold, machinery and transport
Meanwhile, the only import items to see higher demand were electronic products, which posted a modest 1.8 percent increase. Iron and steel imports plunged by 40.3 percent versus last year, followed by a 29.4 percent decline in cereals. Fewer industrial machines were also brought into the country, with the figure sliding by 20.7 percent.
Nicholas Antonio Mapa, senior economist at ING Bank NV Manila, said the imports slowdown was a result of the four-month delay in passing the 2019 national budget.
“[T]he sustained weakness of raw materials and capital goods point to slowing capital formation as both the government and private sector expansion was put on hold,” Mapa said in a market report sent to reporters, noting that construction activities have been “mothballed.”
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Imports of raw materials and intermediate goods, which take more than a third of the total, slid by 16.5 percent compared to last year.
By location, the United States remained the country’s biggest export market, receiving nearly $1 billion worth of locally-made goods. Meanwhile, China was the biggest source of imports at $1.93 billion, more than a fifth of the haul.
