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The value of goods exported and imported by the Philippines in August fell by more than a fifth due to the still weak global demand caused by the COVID-19 pandemic.
The latest preliminary foreign trade data released by the Philippine Statistics Authority (PSA) on Friday showed that merchandise exports declined 18.6 percent year-on-year to $ 5.13 billion last August, which was also lower than the $ 5.68 billion in products made in the Philippines. sold abroad in July.
Imports fell 22.6 percent faster year-on-year to $ 7.2 billion, also surpassed by $ 7.54 billion in July.
As such, two-way trade slipped 21 percent year-on-year to $ 12.33 billion in August, while the goods trade balance remained at a deficit but a narrower $ 2.08 billion compared to $ 3. billion a year ago due to the biggest drop in imported items.
In a note to clients, ING Bank Philippines senior economist Nicholas Antonio Mapa attributed the double-digit contraction in both exports and imports that month to “poor external demand and a struggling domestic economy.”
“The setback in export performance was attributed to the substantial decline in its main semiconductor sector, with exports of electronic products down 20.1 percent. Meanwhile, imports fell substantially with double-digit contractions recorded for capital goods (27.6 percent less), consumer goods (24.6 percent less) and fuels (47.7 percent less) “Mapa pointed out.
Mapa said falling imports, which reduced the trade deficit and reversed the current account to a surplus, would support the strength of the peso in the short term.
While the worst is over for the Philippine economy, UK-based Oxford Economics said last Tuesday that recovery from the COVID-19-induced recession remained sluggish due to the slow rebound in both domestic and external demand. .
Citing Oxford Economics’ growth tracker for emerging markets in Asia, senior economist Stefan Angrick said that “activity reached its lowest point in April, thanks to a collapse in spending on manufacturing and households and sharp falls in exports and imports “amid the then very strict COVID-19 lockdown, which reduced gross domestic product by a record 16.5 percent year-on-year during the second quarter.
“Despite strong gains in May and June, our tracker shows that momentum stalled in July as capacity utilization and imports struggled to pick up pace, reflecting a disappointingly slow initial recovery in domestic demand. “Angrick said in a report titled” EM Asia’s growth trackers point to slow and uneven recovery. “
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