The Philippines’ total foreign trade fell at its fastest pace in April amid a global recession aggravated by the first full month of one of the most stringent COVID-19 lockdowns in the region that halted 75 percent of the country’s economy.
The latest preliminary external trade data released by the Philippine Statistics Authority (PSA) on Wednesday showed merchandise exports falling 50.8 percent to $2.8 billion in April from $5.6 billion a year ago.
The PSA blamed the decline in sales of Philippine-made goods abroad at the start of the second quarter to year-on-year drops in shipments of seven major export commodities: other manufactured goods (64 percent), machinery and transport equipment (63.6 percent), coconut oil (55.5 percent), electronic products (48.6 percent), other mineral products (46.7 percent), fresh bananas (28 percent) and gold (9.5 percent).
April imports declined 65.3 percent to $3.3 billion from $9.5 billion last year.
The decline in imported goods in April was due to the decreases in the top 10 major import commodities led by transport equipment (89.8 percent), mineral fuels, lubricants and related materials (87.4 percent) and miscellaneous manufactured articles (75.5 percent), the PSA said.
National Statistician Claire Dennis Mapa said the record high contractions in exports and imports exceeded the previous records of 40.6-percent decline in January 2009 and 37.1-percent in April 2009, respectively—at the height of the global financial crisis.
Two-way external trade in April totaled $6.1 billion, down 59.8 percent from $15.1 billion a year ago.
Mapa said the drop in total foreign trade that month was also the biggest on record.
As the value of imports still exceeded that of exports, the balance of trade-in-goods remained at a deficit of $499.2 million in April, but 86.9-percent narrower than $3.8 billion last year.
The smaller trade deficit augured well for the peso, Bank of the Philippine Islands lead economist Emilio Neri Jr. noted. “No wonder the peso outperformed in April. Import compression had offset the impact of capital flight and weaker prospects for overseas Filipinos’ remittances. That the peso continues to outperform through June may be a sign that imports and overall demand collapse is still happening until today.”
For ING Bank Philippines senior economist Nicholas Antonio Mapa, the drop in imports was mirrored in the fall in corporate demand for the dollar during the lockdown period, with the peso managing to remain steady throughout the same month with peso spot trading nearly half of the norm.
For 2020, the Cabinet-level Development Budget Coordination Committee has projected goods exports to decline 4 percent and imports to drop 5.5 percent.
Exports and imports of goods were expected to bounce back next year and grow by 5 percent and 8 percent, respectively.