Angelo Taningco
Economist, Treasury Group

Philippine total merchandise trade rose 4.6% year-on-year (yoy) to $11.7 billion in April, a slower pace of increase in comparison to its 18.0% yoy growth posted in March and its 17.5% yoy expansion recorded in April 2016, according to the latest trade data of the Philippine Statistics Authority released on 9 June. Meanwhile, the country’s merchandise trade deficit narrowed 20.5% yoy to $2.1 billion in April as export growth remained positive and in double-digits whereas import growth turned negative.

Merchandise exports grew 12.1% yoy to $4.8 billion in April-the fifth-consecutive month of positive growth-led by electronic exports, which comprised 51% of total export proceeds and posted a 6.8% yoy increase for the month. The second-biggest exportable item was machinery and transport equipment, which contributed 7% to the export revenues and registered 50.5% yoy growth. Out of the top ten exportable commodities in April, nine exhibited positive growth and one incurred a decline. By export destination, Japan became the top source of export revenues for the month, contributing 15% of the proceeds, followed by the United States (US) with 14% export share. April’s export growth was slower than March’s 18.1% yoy but higher than April’s 2016’s −3.4% yoy. On a cumulative basis, merchandise exports climbed 15.3% yoy to $20.3 billion in January-April.

Imports of goods slipped 0.1% yoy to $6.9 billion in April, the first time since February 2016 that it suffered a drop. China, Japan, and South Korea remained the three-biggest country sources of merchandise imports with their respective import shares at 18%, 13%, and 9%. In the top ten importable items for the month, seven posted negative yoy changes led by electronic products, which had a 26% import share and a 0.2% yoy decrease. In the first four months of the year, merchandise imports stood at $28.9 billion, which is 11.1% from the same period a year ago.

The trade deficit was again persistent and has led its cumulative amount to edged up 2.4% yoy in January-April, leveling off at $8.6 billion for the given period. However, its reduction in April bodes well for the second-quarter’s gross domestic product (GDP) growth since this dampens the trade deficit’s or net import’s negative impact on the demand-side of the economy.

Figure 1: Philippine Merchandise Trade
Jan. 2016 – Apr. 2017

 
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