The country’s trade deficit significantly shrunk in April as both exports and imports plunged and posted the highest year-on-year declines in more than a decade amid the disruptions in trade brought by lockdown measures intended to suppress the spread of the coronavirus disease 2019 (COVID-19).
The Philippine Statistics Authority (PSA) yesterday reported the balance of trade in goods in April 2020 drastically declined to half a billion dollars or an annual drop of 86.9 percent, from the $3.8 billion posted a year ago.
The total external trade in goods in April 2020, which amounted to $6.07 billion, fell at a faster rate of 59.8 percent than its previous month’s annual drop of 25.6 percent.
The country’s total export sales in April 2020 amounted to $2.78 billion, a decrease of 50.8 percent from the $5.65 billion total export generated in April 2019.
This contraction was the highest recorded annual decrease in export sales since January 2009, the PSA said.
Total imported goods in April 2020, which amounted to $3.28 billion, plunged at an annual rate of 65.3 percent.
This was also the highest annual decline recorded since April 2009. To recall, many areas in the country, particularly in Luzon, were under enhanced community quarantine beginning mid-March. Quarantine measures continued to be implemented for the entire month of April, and businesses were shuttered, with hardly any economic activity during the period.
Nicholas Mapa, ING Bank Manila senior economist, said in a statement with the government’s resumption of its Build, Build, Build infrastructure program as a means to combat the fallout from the COVID-19 pandemic, imports growth is expected to return in the coming months.
“Inbound shipments for construction materials, fuel and capital machinery used for construction will likely bloat the import bill at a time where export prospects look bleak given projected recessions in major trading partners like the US, Japan and China,” Mapa said. “The widening of the trade gap coupled with the absence of usual dollar inflows from remittances could translate to a swelling of the current account deficit which could spark renewed depreciation pressure on Philippine peso in the second half,” he added.