The Philippines’ trade in goods with the rest of the world climbed 26.1 percent year-on-year to $89.25 billion in the first half of 2021, with six-month exports exceeding prepandemic shipments amid global economic recovery.
The Philippine Statistics Authority’s (PSA) latest preliminary external trade data released on Friday showed that end-June merchandise exports grew by 20.9 percent to $35.9 billion, reversing the 14.1-percent drop a year ago. The end-June figure also exceeded the $34.58 billion posted in the same period in 2019.
Imports, however, grew faster year-on-year to $53.34 billion or by 29.8 percent in the first six months, resulting in a trade deficit of $17.44 billion.
The combined exports and imports from January to June this year of $89.25 billion was up from $70.79 billion last year —when the country was under the most stringent lockdown in the region. It was also closer to the 2019 level of $89.58 billion.
“Exports remain very lumpy from one month to the next, but at least they resumed playing catch-up with the rest of the Asean in June, rebounding by 7.5 percent month-on-month, following the cumulative decline of 10 percent in the previous two months,” Pantheon Macroeconomics senior Asia economist Miguel Chanco said in a report .
The bounce-back was broad-based, though shipments to the United States and Japan were particularly strong, he added.
In June alone, exports rose by 17.6 percent year-on-year to $6.51 billion.
“Encouragingly, exports of semiconductors remain robust, enjoying their third monthly increase in the last four months. Overall, the signal from South Korea’s trade data points to another firm month-on-month rise in total exports in July,” Chanco said.
Last month, the Cabinet-level Development Budget Coordination Committee jacked up the 2021 export growth target to 10 percent from 8 percent due to “expected recovery in external demand.”
In 2020, merchandise exports dropped 8.1 percent to $65.21 billion, no thanks to the global trade slump inflicted by the COVID-19 pandemic.
Chanco said imports “underperformed” in June even as shipments grew 2.7 percent month-on-month. Year-on-year, imports surged 34.2 percent to $9.33 billion.
“Imports of consumer goods were weak, pulling back to their lowest level since February. This could merely be because of the delayed hit of the second virus wave, as these shipments held up surprisingly well through most of the second quarter. The steady rise in imports of capital goods and intermediate goods stayed intact, “ he said.
The government targets a 12-percent growth in imports this year, following last year’s 19.5-percent drop to $89.81 billion.
In June, combined exports and imports rose by 26.8 percent year-on-year to $15.84 billion.
In a separate report, ING Bank senior Philippines economist Nicholas Mapa warned that these foreign trade gains in the first half “may reverse as early as August with authorities reinstating the tightest level of mobility restrictions (enhanced community quarantine) in the capital region and surrounding provinces (Aug. 6 to 20) after confirming the spread of the COVID-19 Delta variant in the country.”
“Should these curbs persist past the two-week schedule, we could see overall trade to dissipate in the coming months,” Mapa said.