The Philippines’ trade in goods with the rest of the world rose 5 percent year-on-year to $43.1 billion in the first quarter of the year amid an overall recovering global economy from last year’s pandemic-induced recession.
The latest preliminary Philippine Statistics Authority (PSA) data showed that merchandise exports from January to March grew by 7.6 percent year-on-year to $17.6 billion, while imports were up by 3.2 percent to $25.6 billion, reversing the 5.6-percent contraction in external trade a year ago. In March alone, total foreign trade climbed 22.5 percent year-on-year to $15.8 billion, the highest value of exports and imports combined since the $16.3 billion recorded in October 2019.
Shipments of Philippine goods overseas jumped 31.6 percent year-on-year to $6.7 billion in March, reversing the 1.5-percent decline in the previous month and 15.8-percent drop a year ago. To recall, global trade plunged at the start of 2020, the COVID-19 pandemic outbreak forced many countries to shut their borders. The first lockdown in China, especially in its manufacturing hub, the province of Wuhan, dragged down world trade early last year.
The PSA attributed the exports recovery in March mainly to jumps in shipments of mineral products (up 195.8 percent year-on-year), chemicals (up 159.8 percent), and manufactured goods (up 115.7 percent). The Philippines’ top export commodity, electronic products, posted a 25-percent growth that month.
Imports sustained growth for the second-straight month, which at 16.6 percent year-on-year to $9.1 billion, was faster than the 8.9-percent increase in February. The value of imported goods that entered the country a year ago fell by 16.7 percent . The PSA said the top performing imports in March were food and live animals (up 30.9 percent year-on-year); telecommunication equipment and electrical machinery (up 28 percent); as well as mineral fuels, lubricants and related materials (up 21.4 percent).
Economists mostly attributed the trade growth in March to base effects. “For exports, we’re seeing a mix of base effects and pickup in electronics shipments tied to global shortage of chip sets,” ING Philippines senior economist Nicholas Mapa said.
Security Bank chief economist Robert Dan Roces attributed the “good” first-quarter turnout to an uplift in regional trade.
“It seems momentum picked up for exports and could be sustained since new export orders were up in April. Imports could soften in light of the ECQ/MECQ. However, the strong peso could hamper exports. [Further rise in] imports could be possible if the economy is reopened,”
Roces said, referring to more stringent enhanced community quarantine and modified enhanced community quarantine reimposed last month in Metro Manila and four neighboring provinces, which accounted for about half of the economy.
For Pantheon Macroeconomics senior Asia economist Miguel Chanco, the jump in exports was “due, as the country’s shipments had been falling behind the recovery in international trade.”
The rebound in imports, meanwhile, “remains intact, and we see no clear evidence of any weakness — yet — against the backdrop of the country’s larger second wave of COVID-19,” Chanco said.
“For the coming months, further pick up in imports and exports could also be supported by still near record low interest rates that could support greater demand for loans/financing for new investments that entail the more importation and also more export production as well as other business/economic opportunities in the supply chain and for related/allied businesses and industries,” Rizal Commercial Banking Corp. chief economist Michael Ricafort, for his part, said.