Philippines: Merchandise exports rise to over 10-year high flattered by supportive base effect in March
Merchandise exports surged 31.6% in annual terms in March, swinging up from February’s 1.5% drop and logging the best result in over 10 years. March’s upturn largely reflected skyrocketing shipments for electronic products, as well as rebounding exports of machinery and transport equipment and other manufactured goods. However, the reading was flattered by a base effect. Similarly, merchandise imports grew a solid 16.6% year-on-year in March, notably above February’s 8.9% rise.
As a result, the merchandise trade balance logged a USD 2.4 billion deficit in March, which was a narrower shortfall than the USD 2.7 billion deficit in the same month of 2020 and also in February. Accordingly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 24.1 billion shortfall in March, compared to the USD 24.5 billion deficit in February.
Commenting on the outlook ahead, Nicholas Mapa, senior economist, at ING said:
“We expect the base effect induced expansion for both exports and imports to continue in the coming months with the Philippine economy relatively more open in 2021 compared to last year. Demand for electronic components given the global chip shortage may also help lift demand for the export sector. Despite these trends, we expect the trade deficit to remain relatively manageable at around $2.5bn as corporate demand for the dollar is weighed down by dimming growth prospects onshore with partial lockdown measures still in place more than a year into the pandemic.”