PH deficit balloons 81.3% in August

• The Philippine trade deficit widened by 81.3% y-o-y to $6 billion as exports continued to shrink

• Philippine merchandise trade grew 14.8% y-o-y, driven by double-digit growth in imports

• Imports increased 26% while exports declined 2% compared with August 2021

• Electronic products were the top import and export commodity. The major types of imports were raw materials and intermediate goods, while those for exports were manufactured goods

The Philippines’ trade deficit ballooned 81.3% in August on the back of a double-digit growth in imports and a slide in exports.

The trade gap hit -$6 billion, higher than July 2022’s 70.9% and August 2021’s 51.9%.

Merchandise trade grew 14.8% year-on-year to $18.82 billion in August 2022, as imports expanded for the 19^th straight month, up 26% in August to $12.41 billion from $9.85 billion year-on-year, but exports slipped 2% to $6.41 billion from $6.54 billion.

Preliminary data released by the Philippine Statistics Authority showed trade increasing for the 19^th month in a row in August 2022, surpassing the $16.39 billion recorded in August 2021.

Of the total trade, 65.9% consisted of imported goods, while the rest were exported products.

The trade improvement was mainly due to spiking values of all the top 10 major commodity groups, with transport equipment growing the fastest at 75.8% y-o-y. This was followed by mineral fuels, lubricants and related materials, which rose 75.6% y-o-y; and food and live animals by 43%.

From January to August 2022, the total value of imports reached $92.97 billion, a 26% increase from the $73.77 billion for the same period last year.

Exports, on the other hand, dropped for the second month straight in August 2022 after 16 months of increases.

Of the top 10 major commodity groups exported, four recorded year-on-year declines in value. These were other mineral products (-23.8%), chemicals (-9.5%), machinery and transport equipment (-2.4%), and electronic products (-1.6%).

From January to August 2022, however, exports increased 4.4% y-o-y to $51.16 billion.

By commodity group, electronic products remained the country’s top export in August 2022 with $3.66 billion or 57.1% share. It was also the top imported commodity group, accounting for 23.3% or $2.89 billion of the total.

By major type of goods, exports of manufactured goods in August 2022 accounted for $5.29 billion of the total, or an 82.6% share. In terms of imports, raw materials and intermediate goods had the largest share at $4.92 billion, or 39.7%.

Imports of personal protective equipment (PPE) and medical supplies, including COVID-19 vaccines, fell 78.3% to $36.06 million in August 2022 from $166.11 million in the same month last year. In August, the country imported $14 million worth of COVID-19 vaccines.

Exports of PPEs and medical supplies likewise dropped 41.6% to $1.07 million from $1.83 million in August 2021.

By major trading partners, China remained the country’s biggest source of imported goods with $2.71 billion, or a 21.8% share, in August 2022. Next came Indonesia, Japan, South Korea, and Singapore.

In terms of exports, the US accounted for the largest share of 16.3% or $1.05 billion, followed by Japan, China, Hong Kong, and Singapore.