Merchandise exports dropped for the fourth straight month in March while imports sustained growth for three consecutive months partly due to a surge in products from China, widening the trade-in-goods deficit by more than a fifth to $9.8 billion at the end of the first quarter.
For the country’s chief economist, one way to arrest weak exports was to pursue more free trade agreements with the Philippines’ trading partners even as protectionism rears its ugly head amid trade tensions between China and the United States.
The latest preliminary Philippine Statistics Authority (PSA) data released on Wednesday showed that shipments of Philippine-made goods overseas declined 2.5 percent year-on-year to $5.88 billion last March, while the value of imported goods that entered the country that month climbed 7.8 percent—a faster pace than a year ago—to $9.01 billion.
As such, the balance of trade in goods remained at a deficit—a wider $3.14 billion compared to $2.34 billion in March last year.
Electronic products, which accounted for 55 percent of the country’s exports last March, posted a 3.7-percent decline in sales to $3.23 billion.
On the other hand, the Philippines’ exports of fresh bananas jumped 81.5 percent that month, PSA said.
Meanwhile, imports of cereals and cereal preparations—which included rice—climbed 97.9 percent in March, the first month that the rice import quota was removed and replaced with a tariff.
From January to March, Philippine exports slid 3.1 percent year-on-year to $16.38 billion while imports grew 4.7 percent to $26.18 billion.
Surging imports widened the trade deficit by 21 percent from $8.1 billion in the same three-month period last year.
The yawning trade deficit resulted in a ballooning current-account deficit as more dollars were being spent for importation.
The current-account deficit hit $7.9 billion last year.
The wider current-account deficit, in turn, had been putting pressure on the peso.
But economic managers had said that with the Duterte administration’s ambitious “Build, Build, Build” infrastructure program in full swing, demand for imports of mostly capital goods would remain strong in the near term.
PSA data showed that the US was the No. 1 destination of exports in the first quarter, which at $2.64 billion accounted for 16.1 percent of the total and rose 4.7 percent year-on-year.