The trade activity in the Philippines is continuing to show recovery, the Department of Finance (DOF) said, but the government should still continue to be vigilant with the prevalence of the highly transmissible Delta variant.
In his latest DOF economic bulletin, Finance Undersecretary and Chief Economist Gil S. Beltran said the country’s external merchandise trade increased for the fifth consecutive month since March 2021, showing continued economic recovery.
In July, external trade totaled $16.1 billion, up 19 percent from a year ago. Import value was recorded at $9.7 billion, an improvement of 24 percent, while exports amounted to $6.4 billion, also higher by 13 year-on-year.
In the first seven-months, the total merchandise trade reached $106.1 billion, 26 percent higher compared with the same period last year. This is also 0.4 percent larger than the figure recorded in the same period in 2019, the last normal year before the pandemic.
The year-to-date export value of $42.4 billion was also 3.8 percent higher than its pre-pandemic level, while total cumulative import receipt of $63.7 billion was 1.8 percent lower than the 2019 level.
“The arrival of additional vaccines and the ramped-up vaccination drive for economic frontliners and Filipinos will help the Philippines sustain the gains in containing the virus and eventually lead the way to economic recovery,” Beltran said.
However, Beltran also said the government will continue to be vigilant and be ready to respond to the additional risks posed by the coronavirus with the appropriate management measures, lest the green shoots in the economy be stamped out completely.
In August, the Manufacturing Purchasing Managers’ Index (PMI) was recorded at 48.6 and 46.4 from the Philippine Institute of Supply Management (PISM) and IHS Markit, respectively.
According to Beltran, this was the first time the PISM Manufacturing PMI fell below 50 this year.
“This contraction is likely due to the tighter quarantine measures imposed on the nation’s capital region and its surrounding regions during the month in an effort to curb the surging COVID-19 infections in the area,” Beltran said.
Last Oct. 1, Shreeya Patel, IHS Markit economist said manufacturers welcomed the relaxation of some virus-related restrictions in the Philippines as a number of factories and businesses resumed their operations in September.
Patel, however, said the domestic and international demand environment remained challenging.
“Job shedding persisted, but anecdotal evidence highlighted that this was mostly voluntary. Nevertheless, backlogs fell solidly which could result in efforts to rein in spending and cut headcounts until demand for Filipino manufactured goods improves,” Patel said.
"Global shortages have also weighed on the sector with prices increasing sharply. Unfortunately, firms will have to endure the disruption as supply pressures show no signs of slowing,” she added.
On a positive note, Patel said the vaccination effort supported optimism, and with the government securing more doses, the Philippines looks committed to inoculating the population.