The trade deficit in the Philippines continues to shrink, with a 33% year-on-year decrease to $3.92 billion in June from $4.44 billion in the same month last year. This improvement is attributed to a decline in imports and stable exports.
Preliminary data from the Philippine Statistics Authority (PSA) shows that while the trade gap improved, the two-way traffic of goods in June decreased by 9.6%, compared to a 4.4% drop in May.
Monthly readouts have been declining due to concerns of a global economic slowdown and weak demand for goods.
In June, the total value of inbound and outbound goods was $17.32 billion, compared to $19.17 billion a year ago.
Exports receipts in June slightly increased by 0.8% to $6.7 billion from $6.6 billion in the same month of 2022.
On the other hand, imports plunged by 15.2% to $10.62 billion from $12.52 billion.
Reasons for the decline in imports
ING Bank senior economist Nicholas Mapa attributes the decrease in imports, which have been falling for the fifth consecutive month in June, to lower shipments of capital goods and raw materials. This decline suggests a slowdown in economic growth as it indicates a constraint on productivity capacity.
S&P Global reports that the manufacturing sector in the Philippines has been expanding year-on-year for the 17th consecutive month, but the growth in June was the weakest in 11 months. The Purchasing Managers’ Index (PMI) for June shows a slight decrease in overall manufacturing growth compared to May.
“Going forward, the sector remains optimistic about growth in the next 12 months,” says Maryam Baluch, economist at S&P Global Market Intelligence. “However, global headwinds could dampen the outlook for manufacturers in the Philippines.”
According to PSA data, electronic products were still the largest export commodity group, accounting for $3.94 billion in receipts in June, or 59% of the month’s total. The value of outbound shipments increased by 12%.
Electronic products were also the top import in the country, with a value of $2.11 billion, representing about one-fifth of the total bill in June. The value decreased by 26.4% compared to a year ago. INQ
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
Denial of responsibility! Samachar Central is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
