Trade deficit widens

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The country’s trade deficit widened in May versus its year ago level amid a sharper drop in exports compared to the minimal decline in imports.

According to the Philippine Statistics Authority, the trade deficit in May stood at $4.6 billion, up 4.5 percent versus the $4.4 billion posted in the same period a year ago.

It is however smaller than the April 2024 trade deficit of $4.7 billion.

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The country’s total export sales in May 2024 amounted to $6.33 billion, down 3.1 percent from the $6.53 billion total exports in the same month of the previous year.

The commodity group with the biggest year-on-year decrease in the value of exports in May 2024 was electronic products with $190.23 million.

This was followed by other mineral products with a drop of $43.66 million and ignition wiring set and other wiring sets used in vehicles, aircraft and ships with an annual decline of $29.54 million.

The year-to-date value of exports amounted to $30.84 billion, up 7.8 percent from the total export value of $28.61 billion in January to May 2023.

Meanwhile, the total imported goods in May 2024 amounted to $10.93 billion, which inched down 0.03 percent from the same month last year.

In May 2024, the commodity group with the highest annual decline in the value of imported goods was transport equipment with $348.54 million.

This was followed by other food and live animals with $62.73 million and electronic products which went down $54.87 million.

The year-to-date annual value of imports totaled to $51.43 billion, posting a decline of 1.7 percent from the total import value of $52.29 billion in January to May 2023.

For the month, the country’s total external trade in goods amounted to $17.26 billion, down 1.2 percent from the $17.46 billion total external trade in the same period of the previous year.

Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said in an emailed statement the country’s external trade data slowed down amid mostly softer global economic data recently.

“Still relatively higher prices/inflation also partly slowed down on global/external trade and investments activities, both for new investments and expansion projects,” Ricafort said.

“For the coming months, further recovery of the global economy and possible Fed rate cuts later in 2024 and in 2025 that could be matched locally amid easing trend in inflation back to central bank targets would lead to some pickup in global trade and investments, including possible pickup/improvement in Philippine exports and imports data,” he added.

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