Philippines: Merchandise export growth picks up slightly in June
Merchandise exports grew 1.5% in annual terms in June, accelerating somewhat from May’s 1.0% growth and ending the second quarter on a more stable footing after the downturn in the first quarter.
Stronger growth in June was primarily due to a recovery in machinery and transport equipment, and cathodes and sections of cathodes of refined copper exports—both had fallen sharply in the prior month—while exports of other mineral products and gold picked up in the month. The improved headline print came despite a slowdown in electronic products shipments (June: +4.3% year-on-year; May: +6.2% yoy) —which account for more than half of total export revenue—on weaker semiconductor exports. Meanwhile, declines in chemicals and metal component exports also weighed on overall export growth.
Imports, on the other hand, closed out the quarter in contraction, falling 10.4% year-on-year in June (May: -5.4% yoy). The sharper decline was largely due to a significant downturn in consumer goods imports, while imports of capital goods also fell in July, after flat growth in June. Meanwhile, imports of raw materials and intermediate goods and purchases of foreign fuels and lubricants continued plunging in the month.
Due to falling imports, the merchandise trade deficit narrowed to USD 2.5 billion in June from the USD 3.6 billion deficit recorded in the same month of the previous year and May 2019’s USD 3.3 billion deficit.
While a sustained downturn in imports throughout Q2 should bode nicely for the external sector’s contribution to GDP growth in the quarter, the fall in consumer goods imports in June, particularly for durable goods, could suggest a slowdown in household spending.