MANILA, Philippines—The Philippines posted its biggest ever monthly trade deficit in May, worth $5.68 billion, due to a surge in imports amid expensive oil and economic recovery.
Citing data from the Philippine Statistics Authority’s (PSA) technical staff, National Statistician Dennis Mapa confirmed to the Inquirer on Tuesday (July 12) that the trade-in-goods deficit or the difference between the value of imported goods that entered the country and sales of Philippine-made products abroad last May was the largest on record.
The gap was a result of the 31.4-percent year-on-year jump in imports to $11.99 billion, which exceeded the exports value ($6.31 billion) as well as pace of growth (6.2 percent), the latest preliminary PSA data showed.
PSA data showed that mineral fuels, lubricants and related materials, whose value rose 128.7 percent year-on-year, led the increase in imported commodities.
In May, total trade or exports and imports combined rose 21.5 percent to $18.29 billion, up 21.5 percent year-on-year and larger than April’s $17.63 billion.
At a press briefing on Tuesday, Customs Commissioner Rey Leonardo Guerrero said both volume and value of imports were on the rise.
Guerrero said import volumes coming through the country’s ports were “much higher” than in previous years. This reflected more economic activities amid rebound from the pandemic-induced slump two years ago.
At the same time, more expensive imported commodities, especially oil, were pushing import values up. It did not help that the peso was depreciating against the US dollar, Guerrero said.
For instance, Guerrero said out of the Bureau of Customs’ (BOC) tax-collection surplus amounting to P76 billion to date, nearly half or P30 billion came from oil import duties.
Customs Deputy Commissioner Teddy Sandy Raval told the Inquirer that about 60 percent of the revenues being collected by the BOC came from oil, as the Philippines imports the bulk of its requirements.
However, this import surge was also further weakening the peso. “Chronic trade deficits are likely to keep the Philippine peso pressured in the near term with the peso now at multi-year weakness,” Dutch financial giant ING said in a report.
Higher imports meant more dollars being spent to pay for these inbound shipments, putting pressure on the country’s current account, which was also expected to remain in a deficit this year.
President Ferdinand Marcos Jr.’s economic team last week raised its 2022 goods imports growth projection to 18 percent from 15 percent previously, while the exports growth expectation was kept at 7 percent.