MANILA, Philippines — The gap in the country’s trade balance further widened in July, the most in four months, as imports continue to outpace exports, the Philippine Statistics Authority (PSA) said.
Total external trade in goods during the month amounted to $13.13 billion, from $12.137 billion in June. This, however, was still a decline of 18.6 percent year-on-year.
Although exports shrank slower at 9.6 percent year-on-year to settle at $5.653 billion in July, import earnings, meanwhile, reached $7.480 billion, a steeper slide year-on-year at 24.4 percent, with the value of inbound shipments now on its 15th month of contraction.
Of the total external trade in July, 57 percent were imported goods and the rest were exports.
This yielded a trade deficit of $1.827 billion, the widest since March this year when pandemic-related lockdowns were first implemented.
Nicholas Mapa, senior economist at ING Bank in Manila, said the July trade performance still reflects the weak global economic environment.
“I do not think that we are seeing the initial stages for a recovery in the trade sector with both exports and imports remaining in the red…export demand remains weak given the downbeat global economic environment,” he said.
“Imports on the other hand are in free fall, reflected in very weak corporate demand for dollars and thus a stronger peso. This trend is worrisome given that the fall in capital machinery and raw materials, which may mean that productive capacity and potential output will be handicapped in the months to come,” he added.
Mapa noted that exports are likely to remain subdued for the balance of the year and possibly into mid-2021 as the global economy slowly recovers from the ill effects of the pandemic.