Philippine exports, imports grow in May
THE COUNTRY’S TRADE in merchandise goods continued to rebound in May as both exports and imports grew, the Philippine Statistics Authority (PSA) reported on Friday.
Preliminary PSA data showed merchandise exports during the month went up by 29.8% year on year to $5.89 billion. This was slower than the revised 74.1% expansion in April but marked a turnaround from the 26.7% decline in May 2020.
Meanwhile, merchandise imports jumped by 47.7% to $8.65 billion, compared with a revised 152.8% surge in April and the 40.5% fall last year.
May marked the third and fourth consecutive month of growth for exports and imports, respectively.
The trade deficit stood at $2.76 billion in May. This was smaller than the $3.08-billion shortfall in April but was bigger than the $1.31-billion gap in May 2020.
Year to date, the trade balance widened to a $14.18-billion deficit, wider than the $9.95-billion trade gap in last year’s comparable five months.
For the same five-month period, exports and imports grew by an annual 21.4% (to $29.35 billion) and 27.6% (to $43.53 billion), respectively. Both figures surpassed the Development Budget Coordination Committee’s revised growth targets for export and imports at 8% and 12% for the year.
Exports of manufactured goods grew by 35.2% to $4.96 billion in May. These goods accounted for 84.2% of total export sales that month.
Electronic products, which made up 69.1% of manufactured goods and 58.2% of total exported goods, grew by 25.4% to $3.43 billion in May. Of these, semiconductors contributed $2.53 billion — up 11.3% from last year.
Exports of forest products rose by 83.5% to $28.17 million in May from $15.35 million in the same month last year.
The sales of mineral products also increased by 23.4% to $460.83 million from $373.44 million.
However, exports were dragged by agro-based and petroleum products, whose sales contracted 15.2% to $348.05 million and 93.2% to $666,465, respectively.
All major import items posted significant annual growth in May.
Purchases of mineral fuels, lubricant and related materials went up four times to $973.57 million in May from $242.44 million in the same month last year. These goods account for 11.3% of the country’s total imports that month versus just 4.1% in the same month last year.
Consumer goods imports were valued at $1.52 billion in May, 49.1% higher from the previous year’s $1.02 billion.
Raw materials and intermediate goods, which accounted for 40.1% of import goods in May, rose by 36.4% to $3.46 billion from $2.54 billion previously.
Imports of capital goods grew by 31.6% to $2.63 billion from $2 billion in the same period last year.
BELOW EXPECTATIONS
Economists noted the trade data was below expectations despite the growth seen during the month.
“Both exports and imports fell modestly below expectations… but the trade deficit widened past expectations for a $2.6-billion shortfall to settle at [a deficit of] $2.8 billion, much higher than the $2.1-billion average during the 2020 lockdown year… although still lower than the $3.5-billion norm prior to the pandemic,” ING Bank NV Manila Senior Economist Nicholas Antonio T. Mapa said in a statement.
Mr. Mapa said that despite the base effect-induced gains, exports “may have been hampered by the lack of shipment options as local exporting firms have complained about the difficulty of fulfilling orders due to bottlenecks in the shipping industry,” he said.
In a separate statement, Pantheon Macroeconomics Senior Asia Economist Miguel Chanco noted the trade performance in May a “disappointing show.”
“We had hoped that exports would put in a better show, as the second wave of COVID-19 (coronavirus disease 2019) retreated. The Philippines has lagged behind the regional trade upswing, and these data now leave it further behind still,” Mr. Chanco said.
“The breakdowns on the import side also were a letdown. Upticks in both capital and consumer goods were modest in the context of the COVID-19-induced April declines. This casts doubt on the government’s infrastructure drive, for now, but we still hold out hope on this front, as the ‘Build, Build, Build’ agenda finally is back on the rails,” he added.
JPMorgan Chase Bank NA Singapore Branch Economist Nur Raisah Rasid noted the recovery in capital goods, particularly in telecommunication-related equipment that makes up nearly half of the overall capital goods imports in May.
“Meanwhile, non-telecommunication related capital goods imports, such as power, remain at pre-COVID-19 levels. In our view, the trend in the non-telecommunication related capital goods imports is key for accessing the breadth of overall economic activity recovery and the implications for growth and external balances,” Ms. Rasid said in yet another statement.
Asian Institute of Management Economist John Paolo R. Rivera noted the growth in imports outpacing that of exports in May.
“This may be indicative of the situation outside the Philippines wherein the ‘Delta’ variant has caused resurgence of succeeding waves of infections. Hence, their demand for our domestic goods has been constrained,” Mr. Rivera said in an e-mail.
OUTLOOK
Security Bank Corp. Chief Economist Robert Dan J. Roces expects the country’s trade to recover, particularly for imports, amid the shift to looser quarantine restrictions and a likely rebound in domestic demand.
“However, the standing quarantine measure will continue to weigh on merchandise trade’s full recovery. Should mobility curbs get relaxed further, we can expect faster improvements for imports in the near to medium term,” Mr. Roces said in an e-mail.
ING Bank’s Mr. Mapa said the Bangko Sentral ng Pilipinas would likely stick to its accommodative stance in the near term given the nascent stages of recovery and import levels still being below pre-pandemic levels.
“Meanwhile, we expect continued pressure on [peso] in the near term as import demand accelerates especially if exports remain hampered by shipping bottlenecks,” Mr. Mapa added. — Lourdes O. Pilar with inputs from Beatrice M. Laforga
