The country’s trade deficit widened in July amid the gradual reopening of the local economy.

The Philippine Statistics Authority (PSA) reported Thursday, Sept. 9, that the gap in the trade balance, or the difference between the value of export and import, rose 54 percent to $3.29 billion from $2.13 billion in July last year.

The trade deficit in the previous month recorded an annual increase of 138.5 percent, while in July 2020, it was at minus 41.4 percent.

The PSA reported that the country’s total export sales in July amounted to $6.42 billion, rising of 12.7 percent although at a much slower pace compared with 18.8 percent in the previous month. In July 2020, total export sales declined 8.9 percent year-on-year.

Of the top 10 major export goods of the Philippines, nine recorded annual increases led by coconut oil with 208 percent.

By major trading partner, exports to China comprised the highest the value amounting to $1.04 billion or a share of 16.1 percent, followed by the United States with $1.03 billion (16 percent), and Hong Kong with $875.16 million (13.6 percent).

In January to July, the country’s total export earnings hit $42.39 billion, higher by 20 percent compared with the same period last year.

Meanwhile, total imported goods in July reached $9.71 billion, up 24 percent from last year. However, it was slower compared with the 43.4 percent growth in June. In July 2020, imports value decreased by 21 percent annually.

Nine of the top 10 major imported goods rose during the month led by mineral fuels, lubricants and related materials with 84.9 percent increase.

Still, China was the country’s biggest supplier of imported goods valued at $2.15 billion or 22 percent of the total, followed by Japan with $997.61 million (10 percent), South Korea with $761.27 million (7.8 percent) and Indonesia with $691.08 million (7.1 percent).

The cumulative import value from January to July 2021 amounted to $3.70 billion, representing an increment of 30.2 percent from the same period last year.

Nicholas T. Mapa, ING Bank Manila senior economist said the Philippine trade numbers reflect the gradual reopening of the economy although the end-July figures may have been bloated due to base effects.

Mapa said Inbound shipments outpaced export growth due in part to increased volume of fuel and as crude oil prices rose over the last year.

“We can expect a pullback in trade activity for the August report after Philippine authorities reimposed tighter lockdown measures during the month,” Mapa said.

“Nonetheless, we forecast import growth to continue to outperform the export sector with the trade deficit likely staying elevated for the balance of the year,” he added.