Philippines: Merchandise exports shrink in March
May 8, 2019
Merchandise exports contracted 2.5% in annual terms in March, falling at a sharper rate than the upwardly revised 0.1% dip logged in February (previously reported: -0.9% year-on-year). March’s poor result marked the fourth consecutive contraction in exports and reflects the effects of a downturn in the tech cycle, a slowing Chinese economy, and weaker global trade amid the ongoing U.S.-China trade clash.
The decline in exports in March was primarily driven by a fall in electronic products shipments (March: -3.7% yoy; February: +0.8% yoy)—which account for more than half of total export revenue—due to slipping semiconductor exports. Meanwhile machinery and transport equipment; metal components; and other manufactured goods exports also tumbled in the month.
Import growth on the other hand picked up to 7.8% in March from 2.6% in February. The acceleration came on the back of a sharp rise in both consumer and capital goods imports.
Overall, the merchandise trade deficit widened to USD 3.1 billion in March, up from the USD 2.3 billion deficit logged in the same month a year prior and the USD 2.7 billion shortfall logged in February.
Philippines Trade Balance Forecast
FocusEconomics Consensus Forecast panelists expect exports and imports to grow 4.0% and 4.6% respectively in 2019, with the trade deficit widening to USD 46.0 billion. For 2020, the panel projects exports and imports to grow 5.1% and 9.1% respectively and the trade deficit to widen further to USD 53.0 billion.
Author: Lindsey Ice, Economist