Trade deficit widened last May as the country’s purchases of goods from abroad significantly outpaced the rise in sales of locally-made products, putting more pressure on the local currency to further depreciate against the US dollar
The Philippine Statistics Authority (PSA) reported on Tuesday, July 12, that the country’s trade gap, or the difference between the value of export and import, reached $5.68 billion, up 78 percent from $3.18 billion in May last year.
Month-on-month, the trade deficit also rose by six percent from $5.35 billion in April.
In the first five-months of the year, the trade deficit reached P24.92 billion, higher by 70 percent compared with P14.62 billion in the same period in 2021.
“Chronic trade deficits are likely to keep Philippine peso pressured in the near term with Philippine peso now at multi-year weakness,” ING Bank Senior Economist Nicholas Antonio T. Mapa said.
Last July 7, the peso fell through the 56 level against the greenback, its weakest closing in nearly 17 years.
Last May, total imports grew 31 percent to $12 billion from $9.12 billion a year earlier. Meanwhile, exports increased by only six percent year-on-year to $6.31 billion from $5.94 billion.
The growth in the value of imported goods was mainly due to the increase in all the top 10 major commodity groups led by mineral fuels, lubricants and related materials with 128.7 percent.
This was followed by cereals and cereal preparations which rose by 65.7 percent as well as iron and steel by 64.2 percent.
The People’s Republic of China remained the the country’s biggest supplier of imported goods valued at $2.43 billion or 20.3 percent of the total receipts.
Completing the top five major import trading partners were Republic of Korea, $1.21 billion (10.1 percent); Japan, $1.04 billion (8.7 percent); Indonesia, $947.62 million (7.9 percent); and Taiwan, $740.37 million (6.2 percent).
At end-May, total imports amounted to $56.80 billion, an increase of 29 percent from $44.02 billion a year ago.
Meanwhile, seven of the country’s top 10 major exports groups recorded annual increases in terms of the value led by coconut oil with 180.5 percent, followed by other mineral products with 32.9 percent, and chemicals with 23.6 percent.
By major trading partner, exports to the United States comprised the highest value amounting to $940.09 million, or a share of 14.9 percent to the total.
Completing the top five major export trading partners were Japan, $900.46 million (14.3 percent); Hong Kong, $896.02 million (14.2 percent); People’s Republic of China, $865.74 million (13.7 percent); and Singapore, $382.98 million (6.1 percent).
In January to May, the country’s export receipts rose 8.4 percent to $31.87 billion from $29.4 billion in the same period in 2021.