Philippine exports recorded a small increment in May 2019 while imports continued to fall, leading merchandise trade to decline 3% to US$15.58 billion from $16.06 billion in the same period last year.
The Philippine Statistics Authority in a report said imports in May 2019 slid 5.4% to $9.43 billion from $9.97 billion in May 2018 due to declines in six of the top 10 major import commodities. The six were iron and steel (-25.5%); transport equipment (-19.3%); mineral fuels, lubricants and related materials (-17.2%); plastic in primary and non-primary forms (-13.7%); industrial machinery and equipment (-4.8%); and other food and live animals (-3.7%). This is the second consecutive month of decline in imports for this year.
Exports, on the other hand, recorded an increase for the second month in a row in May 2019, earning $6.16 billion, or 1% higher than the $6.09 billion in total export sales in May 2018. The improvement was a result of the increase in export sales of eight of the top 10 major export commodities, namely, copper concentrates (192.1%); ignition wiring set and other wiring sets used in vehicles, aircrafts and ships (31.7%); fresh bananas (28.6%); chemicals (20.1%); metal components (14.0%); gold (8.3%); other mineral products (7.0%); and electronic products (6.2%).
The country’s balance of trade in goods, meanwhile, decreased to a $3.28 billion deficit in May 2019, from $3.88 billion deficit in May 2018.
By commodity group, electronic products continued to be the country’s top export with total earnings of $3.45 billion. Electronic products was also the top imported commodity group, with import bills valued at $2.46 billion.
By major trading partners, exports to the United States posted the highest value of $1.081 billion, or a share of 17.6%. Other major export trading partners were China, $896.95 million; Japan, $862.15 million; Hong Kong, $764.83 million; and Singapore, $329.17 million.
China, meanwhile, was the country’s biggest supplier of imported goods with 22.8% share of the total or $2.145 billion. Other major import trading partners were Japan, $822.32 million; South Korea, $750.06 million; USA, $710.60 million; and Singapore, $665.53 million.
Despite the decline in trade performance, the National Economic and Development Authority said imports and exports of goods are expected to be better in the second half of 2019 due to the continued positive economic outlook of the country for the year.
“Global economic outlook for 2019 remains subdued as policy uncertainties and some geopolitical tensions continue to pose risks to many economies. But amid these external developments, the country’s economic outlook remains upbeat,” Socioeconomic planning secretary Ernesto M. Pernia said in a statement.
NEDA noted that both the World Bank and the Asian Development Bank estimate the Philippine economy to grow at 6.4% and 6.5% in 2019 and 2020, respectively. The latest International Monetary Fund forecasts growth of 6.5% in 2019 and 6.6% in 2020.
Moreover, the approval of the Philippine Export Development Plan (PEDP) 2018-2022 is expected to further support external trade. The PEDP, which is anchored on the Philippine Development Plan 2017-2022, will provide a more focused approach in improving the country’s export position.
“Strategies under the PEDP must be implemented in harmony with the Philippine Development Plan 2017-2022 to boost merchandise trade growth,” the Cabinet official said.
The PEDP lays down crucial broad-based reforms to improve the overall climate for export development by removing regulatory impediments, enhancing trade facilitation, and fostering supply chain linkages, among others.
“The Philippines should likewise continue to aggressively pursue regional integration and cooperation to dampen the effects of increasing trade tensions,” said Pernia.
He also noted that efforts to promote a more accommodating business climate must be sustained to attract more investments into the country.
“Investment promotion should be intensified with special priority given to investors who not only provide employment, but also increase the value added of firms located in the country,” Pernia added.