The Philippines’ merchandise trade deficit widened by 23.1 percent year-on-year in March as imports recorded double-digit growth, data released by the Philippine Statistics Authority (PSA) on Wednesday showed.
In a statement, the PSA said the trade deficit in March stood at $4.128 billion, growing from $3.354 billion in March of last year.
The comparative trade deficit in February 2025 amounted to $3.457 billion.
In March, imports rose 11.9 percent to $10.721 billion from $9.579 billion import value a year earlier.
Total exports increased by 5.9 percent to $6.593 billion in March 2025 from $6.225 billion in the year-earlier period.
Trade Deficit
“If the imports are raw materials, capital equipment, then they should be good indications of a growing and robust economy,” Department of Economy, Planning, and Development Secretary Arsenio Balisacan told reporters on the sidelines of a conference in Quezon City on Wednesday.
He was seconded by two analysts from the private sector, who agreed that rising imports meant businesses were expanding their output.
The PSA said imports of raw materials and intermediate goods accounted for the biggest share of the country’s total imports in March 2025, amounting to $3.92 billion (36.5 percent).
This was followed by capital goods, with a share of $3.16 billion (29.5 percent) and consumer goods, $2.3 billion (21.4 percent).
Asked about the impact of US tariff measures on the Philippines’ trade performance, Balisacan said: “No country is not disturbed by that. Even… at least a broad section of the US business community are also concerned. We hope that this uncertainty will settle down soon, because otherwise the global trade and economy will suffer.”
He reiterated his remark about the beneficial effects to the economy of imports. “ I would not mind a deterioration of the trade deficit if the composition of the imports is for future expansion,” Balisacan said.
In March 2025, the country’s total external trade in goods amounted to $17.314 billion, up by 9.6 percent from the $15.804 billion total external trade in the same period of the previous year.
John Paolo Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the strong rebound in imports is “a sign of domestic economic activity picking up, but the mismatch with export growth underscores the need to diversify and strengthen export capacity.”
Rivera said the global tariff uncertainty, especially from the US, may cause volatility in export demand and affect sourcing decisions, which could impact the April trade figures.
Exporters may face margin pressures and delays in global shipments,” he added.
Reinielle Matt Erece, economist at Oikonomia Advisory & Research agreed with observations that the import surge may be a sign of capital investment by firms in expanding their businesses.
“I don’t think the impact of the trade war is still a factor for the trade balance in March,” Erece said.
“For April, I think we can still see good growth for exports as the tariff increases were paused for a few weeks. Importers especially in the US may stock up on goods, benefitting the country’s exporting industries,” he added.
However, Erece aired pessimism about the trade outlook for the rest of the year.
“Heightened tariffs on Philippines products to the US may weaken export growth,” he said.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said the faster growth in imports that led to wider trade deficit was partly due to the stronger peso exchange rate versus the US dollar that made imports cheaper from the point of view of local buyers, as well as relatively lower prices of major global commodity prices, thereby boosting demand.
