The country’s trade deficit widened by double-digits in February after imports expanded for the first time in nearly two-years, preliminary data from the Philippine Statistics Authority (PSA) showed.
Based on the PSA report released on Thursday, April 8, the gap in the trade balance, or the difference between the value of export and import, jumped by 16.5 percent to $2.29 billion from $1.97 billion a year earlier.
The February trade gap, however, is lower by 20 percent compared with $2.87 billion in January.
In the first two-months of 2021, trade balance registered a $5.17 billion deficit, but this is 9.6 percent narrower compared
with $5.72 in the same period last year.
Merchandise exports declined by 2.3 percent year-on-year in February to $5.31 billion from $5.43 billion, while imports rose 2.7 percent to $7.6 billion from $7.4 billion in February last year, the PSA data revealed.
The United States remained the primary buyer of Philippine-made goods, valued at $895.74 million, or a share of 16.9 percent to the total exports during the month.
Other top export markets were Japan with $880.59 million, Hong Kong with $659.22 million, People’s Republic of China with $639.42 million and Thailand with $260.24 million.
Electronic products continued to be the country’s top export, accounting for 56.2 percent of the total, or $2.98 billion, followed by other manufactured goods with $350.35 million as well as machinery and transport equipment with $205.86 million.
Meanwhile, China was the country’s biggest supplier of imported goods valued at $1.90 billion, or 24.9 percent of the total, followed by Japan with $693.19 million, South Korea with $680.96 million, Singapore with $560.16 million and Indonesia with $513.85 million.
Imports of raw materials and intermediate goods, on the other hand, accounted for the largest share to the total imports at $2.97 billion, while capital goods ranked second with a share of $2.56 billion, followed by consumer goods with $1.32 billion.
Nicholas Antonio T. Mapa, ING Bank N.V. Manila senior economist said the slip in exports was unexpectedly while the growth in imports was the first time in 21 months.
But Mapa noted that the rebound in imports might be more a result of base effects rather than a true recovery for the sector with the economy still stuck in recession amid an ongoing 12-month lockdown.
“Inbound shipments of goods and services will continue to expand in the coming months, benefiting from a favorable base and with manufacturers replenishing depleted inventories,” Mapa said in a research note.
“Meanwhile, exports may face some challenges in the near term with global trade expected to take a hit after select countries reinstate lockdowns to deal with spiking COVID-19 cases in their areas,” he added. Mapa also expects the trade deficit will remain modest compared to pre-pandemic averages which should translate to a current account surplus and near-term support for the peso.