The country’s trade deficit narrowed in May as imports contracted while exports recorded a moderate increase, data released by the Philippine Statistics Authority (PSA) showed.
According to the PSA, the trade deficit amounted to $4.4 billion in May, 20.9 percent down versus the $5.56 billion trade gap recorded in the same period a year ago.
It is also smaller than the $4.84 billion deficit recorded in the previous month.
The country’s total export sales in May 2023 amounted to $6.44 billion compared with $6.32 billion in the same month of 2022. This indicates an annual increase of 1.9 percent.
Imports, on the other hand, amounted to $10.84 billion, posting a year-on-year decrease of 8.8 percent from $11.88 billion in the same month of the previous year.
Thus, the country’s total external trade in goods amounted to $17.28 billion, 5.1 percent down from its level of $18.2 billion in the same period a year ago.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said in an emailed statement exports recovered to among six-month highs after the pickup in the shipment of electronic/semiconductor products , which are the country’s largest exports, and the easing of prices of global oil and other major commodities that reduced the input costs of exporters.
Ricafort also noted the easing concerns over the US regional bank failures since March 2023, thereby partly reducing the risk of US recession.
Ricafort added imports picked up to among the highest since the start of 2023, amid lower prices of imported oil and other commodities and the stronger peso exchange rate versus the US dollar that also helped reduced importation costs in recent months and helped encourage greater demand for imports.
“Trade deficit already is among the narrowest in more than a year, thereby partly supporting the stronger peso exchange rate recently,” he said. – Angela Celis
