Trade deficit balloons to $3.29B in July

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Metro Manila (CNN Philippines, September 9) — The country’s trade deficit widened by 54.1% in July from the same month a year ago, the Philippine Statistics Authority reported Thursday.

Data from the agency revealed the difference between total exports and imports stood at $3.29 billion during the month, up from $2.13 billion in July last year. The latest deficit is smaller than the $3.39 billion tallied this June.

Total export sales climbed by 12.7% in July to $6.42 billion, noted the PSA.

All exported commodity groups registered positive growth rates during the period except for machinery and transport equipment, which logged a 5.4% decline. Coconut oil performed best among the groups with an annual 207.7% growth rate.

China replaced the United States as the Philippines’ top major trading partner in July. Exports to Beijing amounted to $1.04 billion, followed by Washington at $1.03 billion. Completing the pack were Hong Kong, Japan, and Singapore.

The country’s overall imports also grew during the period, standing at $9.71 billion – a 24% increase.

Save for miscellaneous manufactured articles which contracted by 8%, all major commodity groups for imports expanded in July. Mineral fuels, lubricants and related materials topped the list, improving by 84.9%.

“Philippine trade numbers reflect the gradual reopening of the economy although the (year-on-year) figures may have been bloated due to base effects,” said ING Bank senior economist Nicholas Mapa on the latest figures.

Mapa also noted that trade activity might fall in August with the return of stricter lockdown measures during the month as authorities aim to quash the Delta-driven surge in COVID-19 infections.

“Nonetheless, we forecast import growth to continue to outperform the export sector with the trade deficit likely staying elevated for the balance of the year,” he noted.