Trade shortfall narrows in June

MANILA, Philippines —  The Philippines’ trade gap narrowed in June as exports increased at a faster pace than imports. Preliminary data released by the Philippine Statistics Authority (PSA) yesterday showed that the balance of trade in goods – the difference between the value of exports and imports – amounted to a $3.95-billion deficit  in June, nine percent lower than the $4.34 billion shortfall in the same month last year.

The June trade gap, however, widened by nine percent from the previous month’s $3.63 billion deficit.

From January to June, the country posted a slimmer trade deficit of $23.97 billion compared to the $25.06 billion trade shortfall in the same period last year.

Merchandize exports  went up by 26 percent to $7.02 billion in June from $5.57 billion in the same month last year.

Electronic products registered the highest increase in exports value in June, growing by 30 percent to $3.89 billion from $2.99 billion in the same month in 2024.

In terms of export markets, the United States accounted for the biggest share amounting to $1.21 billion or 17 percent of the Philippines’ total exports in June.

Export earnings in the first half amounted to $41.24 billion in June, 13 percent higher than the $36.44 billion in the same period last year.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an email yesterday that the higher exports may be due to the “frontloading of some Philippine exports for the various global supply chains before (US President Donald) Trump’s higher US import tariffs take effect.”

Trump announced a pause on reciprocal tariffs on April 9, to give time for negotiations with trade partners. This brought the reciprocal tariffs on exports of non-retaliatory countries like the Philippines to 10 percent.

Prior to the pause, the US announced a 17-percent tariff on Philippine exports.

A 19 percent tariff will be imposed on Philippine exports to the US starting Aug. 1, following negotiations between the two countries. This is lower than the 20 percent tariff that Trump announced earlier this month.

While the 19 percent tariff offers some clarity on trade policy, Chinabank Research said in a commentary yesterday that potential tariffs on  chips and the eventual tapering off of frontloading momentum could weigh on future export demand.

“On the upside, we are seeing strong growth in exports to other markets, which could help offset potential softer demand from the US,” it said.

PSA data also showed that the country’s total imports climbed by 11 percent to $10.98 billion in June from $9.9 billion in the same month in 2024.

Transport equipment posted the highest increase in imports, with the total value rising by 66 percent to $1.32 billion in June from the previous year’s $791.67 million.

China was the largest supplier of the country’s imported goods valued at $3.10 billion or 28 percent of the total in June.

Goods imported by the Philippines from January to June reached $65.22 billion, up by six percent from $61.5 billion in the same period last year.