Trade deficit shrank 33% to $3.92B in June
MANILA -The Philippines’ trade deficit is still shrinking, by 33 percent year-on-year to $3.92 billion in June from $4.44 billion in the same month last year as the import bill continued to fall while exports were stable.
Preliminary data at the Philippine Statistics Authority (PSA) show that while the trade gap improved further, two-way traffic of goods in June decreased much more at 9.6 percent compared to a 4.4-percent drop a month earlier in May.
Monthly readouts continued to recede amid concerns of a global economic slowdown and tepid demand for goods.
Last June, the total value of inbound and outbound goods was pegged at $17.32 billion. A year ago, this was $19.17 billion.
Also in June, export receipts increased slightly by 0.8 percent to $6.7 billion from $6.6 billion in the same month of 2022.
At the same time, imports plunged by 15.2 percent to $10.62 billion from $12.52 billion.
ING Bank senior economist Nicholas Mapa said the downtrend on imports, which fell for the fifth straight month in June, was mainly on account of less shipment of capital goods and raw materials.
Mapa said decreasing inbound traffic of these items point to a slowing momentum of economic growth as less of these means productivity capacity is constrained.
S&P Global said the manufacturing sector in the Philippines continued to expand in June but slower amid signs of weakening demand for the products.
S&P Global reported that the Philippine manufacturing sector has been expanding year-on-year for the 17th consecutive month, but the June readout was the weakest in 11 months or since July 2022.
A PMI of above 50 means an overall increase (more positive responses than negative) while less than 50 means an overall decrease (more negative answers than positive).
Based on S&P Global’s monthly survey in the Philippines for June, overall manufacturing growth that month was supported by continued expansion in production and factory orders. Even then, growth in both these factors was slower compared to May.
“Going forward, the sector remains optimistic of growth in the coming 12 months,” said Maryam Baluch, economist at S&P Global Market Intelligence. “However, global headwinds could dampen the outlook for manufacturers in the Philippines.”
PSA data show that electronic products were still the biggest export-earning commodity group, with $3.94 billion in receipts last June or 59 percent of the month’s total. The value of outbound shipments increased by 12 percent.
Electronic products were also the country’s top import with a value of $2.11 billion or about one-fifth of the total bill in June. The value dropped by 26.4 percent from $2.87 billion a year ago. INQ