The Philippines’ external trade posted a deficit of $3.12 billion in September, down 22.5 percent from $4.02 billion recorded last year.
The Philippine Statistics Authority (PSA) said for the month, the country’s total external trade in goods reached $14.92 billion, a decline of 7.5 percent from $16.13 billion last year, with exports at $5.90 billion and imports at $9.02 billion.
Of the country’s top exports, electronic products continued to dominate totalling $3.59 billion, up 3.8 percent from $3.46 billion last year. The sector accounted for about 60.9 percent of the total exports.
“Components/devices (semiconductors) accounted for the biggest share of 46.3 percent among the electronic products. Exports of these products moved up by 5.4 percent, from $2.59 billion in September 2018 to $2.73 billion in September 2019,” the PSA said.
The decline of export receipts meanwhile was attributed to the drop in shipment of seven of the top 10 major export commodities — metal components (-25.8 percent); articles of apparel and clothing accessories (-20.7 percent); machinery and transport equipment (-20.0 percent); miscellaneous manufactured articles, n.e..s. (-8.1 percent); ignition wiring set and other wiring sets used in vehicles, aircrafts and ships (-7.0 percent); other manufactured goods (-6.3 percent); and gold (-1.8).
The PSA said in terms of major types of goods, manufactured goods accounted for 85.5 percent of total exports worth $5.04 billion, followed by agro-based products and mineral products worth $423.28 million and $290.42 million, respectively.
The September imports meanwhile were billed at $9.02 billion, down 10.5 percent from $10.08 billion last year.
As in exports, import bills for electronic products were the top contributor at $2.28 billion, up 7.1 percent from $2.46 billion last year and comprise 25.3 percent of total imports.
“Among the electronic products, components/devices (semiconductors) accounted for the biggest share of 16.3 percent. However, shipments of this commodity group declined by 15.3 percent, from $1.73 billion in September 2018 to $1.47 billion in September 2019,” the PSA said.
The decline in the imports bill meanwhile is attributed to the drop in sourcing of seven of the top 10 major import commodities — iron and steel (-46.8 percent); cereals and cereal preparations (-22.0 percent); mineral fuels, lubricants and related materials (-14.5 percent); plastics in primary and non-primary forms (-9.4 percent); transport equipment (-7.8 percent); electronic products (-7.1 percent); and industrial machinery and equipment (-1.2 percent).
Imports of raw materials and intermediate goods contributed the largest share of the total import value worth $3.19 billion. Semi-processed raw materials contributed $2.90 billion or 32.2 percent to the total imports.
“Imports of capital goods ranked second, which shared 32.5 percent or an import value of $2.93 billion. Consumer goods placed third with a share of 19.1 percent or an import value worth $1.72 billion,” the PSA said.
Japan was recorded to be the Philippines top export market in September, with a total receipt of $957.06 million, up 19.1 percent from $803.90 million and comprising 16.2 percent of the September export pie.
Other major export trading partners for the period were the United States, $904.15 million; Hong Kong, $868.59 million; People’s Republic of China (PROC), $780.24 million; and Republic of Korea, $329.43 million.
PROC was the top source of imports, at $2.13 billion, up 9.23 percent from $1.95 billion and accounted for 23.6 percent of the September import pie.
“Other major import trading partners were Japan, $831.88 million; US, $643.50 million; Republic of Korea, $626.21; and Thailand, $621.31 million,” the PSA said.
The National Economic and Development Authority (NEDA) in a statement said the government should take advantage of recovering exports to selected markets while sustaining the improvement of infrastructure to uplift the trade sector.
“Despite the overall decline in export performance, our export trade to Korea posted double-digit growth rate for the third consecutive month and exports to Japan showed a significant turnaround from a decline in the previous period,” said Ernesto Pernia, socioeconomic planning secretary.
“These export bright spots will pave the way for the country’s trade recovery over the near term,” Pernia said.
Pernia also took note of the persisting US-China trade tensions which have escalated beyond tariffs, as the US blacklisted certain companies and imposed visa restrictions on Chinese officials.
The far-reaching and widespread cost of the trade war also finds its spotlight in the latest IMF World Economic Outlook, which estimates a near standstill in trade growth and a slowdown in growth in nearly 90 percent of the world.
“Moreover, the government must sustain faster infrastructure spending in the fourth quarter to achieve the target disbursement performance for the year. The push for high impact and implementable infrastructure projects under the Build, Build, Build program is expected to improve transport and logistics, which are crucial in supporting the growth of exports,” Pernia said.
He added that the timely passage of the proposed 2020 national budget is important to sustain the implementation of construction-related projects and activities.