PH trade deficit shrank 14.9% in April, says PSA
MANILA -The country’s trade deficit shrank by 14.9 percent year-on-year in April as two-way trade, exports as well as imports declined sharply, which could indicate that economic growth is slowing compared to the start of this year.
Preliminary data at the Philippine Statistics Authority (PSA) show that the import bill exceeded export earnings by $4.53 billion in April compared to $5.3 billion in the same month last year.
Also, while the trade gap improved significantly, two-way traffic of goods in April also dwindled by 18.6 percent to $14.3 billion from $17.6 billion.
On April, export receipts fell faster by 20.2 percent to $4.9 billion from $6.1 billion a year ago when the value of outbound shipments decreased by 9 percent.
In the same months compared, imports also fell faster by 17.7 percent to $9.4 billion from $11.46 billion when the volume ballooned by 29 percent.
A month earlier, in March, the trade deficit ballooned by 11.2 percent while two-way traffic eased by 4.2 percent. Also in March, exports decreased by 9.1 percent as did imports by 1.2 percent.
In April, electronic products remained the biggest export-earning commodity group, with $2.67 billion in receipts or 54 percent of the month’s total. However, the value of shipments plunged by 18 percent.
Completing the top three exports were “other manufactured goods” with $276 million and “other mineral products” with $208 million.
Electronic products were also the country’s top import with a value of $2.12 billion or about one-fifth of the total bill in April.
These were followed by mineral fuels, lubricants, and related materials valued at $1.25 billion; and transport equipment at $849.7 million.
Nicholas Mapa, senior economist at ING Bank, said April imports were on the downtrend, decreasing for the third straight month.
“The sustained contraction in imports suggests that growth momentum, outside still robust consumer demand, has begun to moderate,” Mapa said.
The economist said capital goods and raw materials—two key components that point to economic expansion—have largely been contracting while energy imports are expected to maintain the freefall due to lower dollar prices for crude oil compared to last year.
“The trends we note in imports move-in line with our expectation that the first-quarter gross domestic product growth [of 6.4 percent] will likely be the highest for the year,” he added.
Further, Mapa said the outlook for exports was not particularly upbeat as the Philippines’ regional trading partners were also reporting challenges for the electronics sector.
“Given the size of electronics exports to total, we are likely to see exports lower at least in the near term,” he said.
As for the trade deficit, Mapa said recent trends for this metric suggest that it will not approach the record wide levels reported in 2022 when the gap reached $6 billion in August.
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