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Philippine exports contracted in January after rising in the previous two months, while imports continued to decline during the 21st month, the Philippine Statistics Authority (PSA) said on Friday.
Merchandise exports contracted 5.2% to $ 5.49 billion in January from 9.4% growth the previous year, according to preliminary data. Exports grew 1.7% in December.
Imports also fell 14.9% to $ 7.911 billion in January, worse than the 8.2% and 2.8% drops in December and January 2020, respectively.
These figures were below the growth targets of the Development Budget Coordination Committee of 5% and 8% for exports and imports this year.
The latest trade figures brought the trade balance to a deficit of $ 2.42 billion in January, wider than the gap of $ 2.149 billion in December, but narrower than the deficit of $ 3.504 billion in January last year.
Total foreign trade in goods for the year, the sum of exports and imports, contracted by 11.1% to 13,401 million dollars.
The growth of export sales of manufactured goods, which represented 85.7% of the total in January, remained stable at 0.02% at P4.704 billion.
Exports of electronic products, which represented 59.1% of the total, increased by 0.3% to 3,244 million dollars. This was despite a 4.4% drop in semiconductors, which made up nearly three-quarters of electronic products,
Agricultural exports fell 22.7% to $ 332.56 million from $ 430.12 million the previous year.
Meanwhile, imported raw materials and intermediate goods decreased 9.2% to $ 3,197 million. These constituted 40.4% of total imports.
Capital goods, which accounted for a third of January imports, fell 14.8% to $ 2.59 billion from a year earlier. Imports of mineral fuels, lubricants and related materials fell by a third to $ 681.74 million.
Nicholas Antonio T. Mapa, a senior economist at ING Bank NV Manila Branch, described the country’s trade performance as “more of the same,” with the economy stuck in a recession.
“The poor performance of exports related to food manufacturing is linked to recent storm damage that affected crop production” that affected economic growth in the fourth quarter, it said in an emailed note.
The Philippine economy contracted 9.5% last year amid a coronavirus pandemic, the worst since World War II.
“The current drop in imports suggests that growth problems for the Philippines will be around for some time,” Mapa said.
A possible rebound in consumer goods could indicate a rebound in domestic activity, said Milo Gunasinghe, a research analyst at JPMorgan, in a separate note.
“The January printing suggests that such a trend has yet to materialize and supports our narrative of a fragile economic recovery ahead,” he said.
A “substantial widening” of the trade deficit is also expected in the second half given the country’s fragile recovery, he added.
Trade could still change as more people get vaccinated against the coronavirus. The president of the Philippine Exporters Confederation, Inc., Sergio R. Ortiz-Luis, Jr., said by phone.
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