The country’s exports and imports in June posted another double-digit decline, although at a slower pace compared to the figures in the previous month.
The Philippine Statistics Authority (PSA) yesterday reported the country’s total export sales in June 2020 amounted to $5.33 billion, a decrease of 13.3 percent from the $6.15 billion total export generated in June 2019.
The PSA said the annual drop in June 2020 was the fourth month that total exports had consecutive negative growth.
In the previous month, export value fell at an annual rate of 26.9 percent while in June 2019, it gained at a rate of 3.9 percent.
Outward shipments of mineral products, manufactured products, and forest products registered notable improvements, the National Economic and Development Authority (NEDA) said in a separate statement.
Total imported goods in June 2020, which amounted to $6.63 billion, plunged at an annual rate of 24.5 percent, from the $8.79 billion posted a year ago.
In the previous month, the decline was faster at 40.6 percent while in June 2019, imports decreased by 7.2 percent annually.
NEDA said the inward shipments of unprocessed raw materials showed a positive rebound with the re-opening of the economy.
The PSA data showed that the country’s total merchandise trade further eased its negative trajectory in June 2020 with a slower decline of 19.9 percent, after a steep 35.3 percent contraction in May 2020.
The balance of trade in goods for June 2020 posted a gap of $1.3 billion which represents a trade deficit with an annual decline of 50.6 percent.
In the previous month, trade deficit fell at a faster rate of 63.8 percent and in June a year ago, it was slower at 25.8 percent, the PSA said.
“This slower decline in the country’s trade performance signals the resumption of economic activities,” Karl Kendrick Chua, acting socioeconomic planning secretary, said in a statement.
However, the recent issuance to revert Metro Manila, Bulacan, Cavite, Laguna and Rizal back to a Modified Enhanced Community Quarantine (MECQ) status may, for a limited period, affect businesses and the workforce as certain sectors need to scale back or temporarily suspend operations, NEDA said.
“The two-week MECQ will allow the government to reassess approaches, procedures, and response protocols and capacities that may need to be improved to better contain the spread of the virus while ensuring that the gains from reopening the economy are not fully reversed,” Chua said.
Chua also said that government efforts will continue to focus on realizing structural reforms and supporting needed legislations to ensure that businesses will be supported as the economy recovers.
“NEDA has been working closely with relevant departments and both houses of congress to prioritize reforms that will help the economy recover, promote competitive playing field, and allow firms to maximize productive capacity,” he added.
Meanwhile, on a global perspective, NEDA pointed out that trade flows to most of the country’s major trading partners remained in the negative territory but contractions were at a slower pace compared to the previous months.
Exports of goods to the European Union improved largely by 25 percentage points while the progress in East Asia and Asean continued as contraction narrowed by almost 18 percentage points from the previous period.
“As Asean countries account for more than 15 percent of the country’s total exports, the contraction in these countries’ gross domestic product (GDP) would need to be closely watched as further drop in their economies could affect trade flows and may reverse the improvements in trade observed during the period,” Chua said.
The decline in merchandise exports can also be partly due to demand factors, particularly how the Philippines’ trading partners are faring economically, NEDA said.
“With restricted mobility and economic activity due to the global pandemic, GDP growth is negatively affected. Our major trading partners’ GDP has declined in the second quarter of the year, resulting in a reduced appetite for imported goods. This has led to lower demand for Philippine exports,” Chua said.