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By Matthew Miguel L. Castillo
The Philippines’ trade shortfall in goods further reduced to a three-month low in May as exports increased while imports kept declining, the Philippine Statistics Authority (PSA) disclosed on Friday.
Preliminary figures from the PSA indicated that the nation’s trade balance in goods — the contrast between the values of exports and imports — resulted in a deficit of $3.29 billion in May, down from the $4.73-billion gap recorded in the same month last year.
It also decreased from the adjusted $3.97-billion deficit in April.
The trade shortfall in May was the smallest in three months, or since the $2.97-billion gap noted in February.
The country’s monthly trade balance has been in the negative for a decade, since the $64.95-million surplus reported in May 2015.
The figure for May elevated the trade-in-goods deficit to $19.68 billion for the five months leading to May, narrower than the $20.72-billion gap during the same timeframe last year.
“Exports were able to grow significantly, supported by strong demand for electronics as well as a considerable rise in agro-based exports,” asserted Metropolitan Bank & Trust Co. Chief Economist Nicholas Antonio T. Mapa in an e-mail.
He further noted that imports diminished in May due to the decreased value of oil imports, while shipments of raw materials also fell.
“Crude oil prices are lower compared to last year, even after the recent increase in crude oil. Raw materials saw a decline, but we did observe a positive trend for consumer imports, reflecting an optimistic outlook for household spending this year,” Mr. Mapa stated.
Outbound shipments of Philippine-manufactured goods rose by 15.1% year-on-year to $7.29 billion in May.
This marked the export’s fifth consecutive month of growth this year and the highest since the 28.2% increase registered in April of the previous year.
In terms of value, May’s export performance represented the highest point in 31 months, or since the $7.75 billion reported in October 2022.
The nation’s electronic product exports, including semiconductors, reached $3.85 billion in May, up by 8% from $3.56 billion a year prior.
This category remained the nation’s leading export product, constituting over half of total exports in May.
Sales of other manufactured items surged by 70.6% to $583.06 million, while other mineral products slightly rose by 0.9% to $308.16 million.
The United States captured the majority of Philippine-made products in May with $1.104 billion (15.3% share). It was closely followed by Hong Kong ($1.108 billion or 15.2% share) and Japan ($1.04 billion or 14.3% share).
Meanwhile, the nation’s merchandise imports continued to decline for the second consecutive month in May, contracting by 4.4% annually to $10.58 billion.
This represented the steepest drop in 11 months or since the 7.2% decrease registered in June 2024.
May’s import figure was the lowest in three months, or since the $9.76 billion in February.
Imports of electronic products increased by 8% to $2.35 billion in May, making up over a fifth of the total import expenditure that month.
On the other hand, mineral fuels, lubricants, and related materials decreased by 39.6% to $1.17 billion in May, while imports of transport equipment rose by 17.1% to $1.05 billion.
China remained the country’s largest source of imports, totaling $3.15 billion (29.7% share) for that month. Indonesia followed with $904.27 million (8.5% share) and Japan ($807.89 million or 7.6% share).
Exports grew by 10.8% to $34.20 billion in the five months through May, while imports rose by 4.4% to $53.87 billion. These year-to-date increases exceeded the government’s downwardly adjusted goals of a 2% decrease in exports and a 3.5% rise in imports this year.
“Year-to-date export figures have been promising; however, we remain cautious of potential risks such as the global tariffs imposed by the US, which could dampen demand for exports from the Philippines or from other countries that utilize Philippine-made components,” Mr. Mapa mentioned.
“We are also monitoring import patterns, as sluggish growth in imports is largely attributed to lower year-on-year oil prices and modest increases in capital imports,” he added.
Conversely, Philippine Exporters Confederation, Inc. President Sergio Ortiz-Luis, Jr., remarked that the Philippines is strategically positioned amid trade disputes and should strive to “maintain its stance” for optimal growth rates in both imports and exports for the remainder of the year.
US President Donald J. Trump instituted heightened reciprocal tariffs on most of the nation’s trading partners in April. Philippine exports are subjected to the second-lowest rate within the Association of Southeast Asian Nations at 17%.
However, the enforcement of these tariffs has been delayed for 90 days, lasting until July, while a standard 10% tariff continues to be applicable.
Mr. Ortiz-Luis added that the discord between Israel and Iran is likely to have minimal effects on the nation’s trade performance due to the truce reached by the two countries.
“The only concern is fuel,” he stated in a phone interview with BusinessWorld. “If [prices] decline next week, we hope the situation can be [st stabilized].”
A conflict erupted in the oil-rich Middle East after Israel targeted Iran’s nuclear sites on June 13. Mr. Trump announced a ceasefire last week, alleviating concerns over possible disruptions to the critical Strait of Hormuz shipping route, according to Reuters.
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