The country’s trade deficit widened by 26.6 percent in January to $5.7 billion from $4.5 billion a year earlier as merchandise exports fell sharply amid higher global inflation.
Data from the Philippine Statistics Authority showed on Tuesday that exports shrank 13.5 percent in January to $5.23 billion from $6.04 billion in the same month in 2022, while imports rose 3.89 percent to $10.97 billion from $10.559 billion.
“Higher imports could also be due to some pickup in the prices of global commodities during the month after China reopened its economy from COVID restrictions since December 2023 that led to some upward correction in some global commodity prices since China is the world’s biggest importer of oil and other major global commodities,” said Rizal Commercial Banking Corp. chief economist Michael Ricafort.
Ricafort said aside from softer exports data because of elevated inflation, higher interest rates also weighed on demand, while the risk of recession in the United States contributed to the larger trade shortfall.
“For the coming months, the recent easing of global oil and other commodity prices amid risk of US economic slowdown would somewhat be a challenge for exports, but could still help ease the country’s imports of oil and other major global commodities,” Ricafort said.
The PSA said of the top 10 major commodity groups in terms of FOB value of exports, six commodity groups recorded annual decreases in January 2023 led by coconut oil; cathodes and sections of cathodes, of refined copper; metal components; electronic products; chemicals, and other manufactured goods.
Electronic products continued to be the country’s top export in January with total earnings of $2.83 billion, which accounted for 54.2 percent of the total exports during the period. This was followed by other mineral products with an export value of $290.17 million and other manufactured goods with $282.22 million.
The PSA said that in terms of imports, seven of the top 10 major commodity groups registered higher FOB value, with metalliferous ores and metal scrap posting the fastest annual increase of 333.5 percent. This was followed by mineral fuels, lubricants and related materials, which increased by 70.6 percent annually; and telecommunication equipment and electrical machinery by 15.2 percent.
Most of the imported goods in January were electronic products with an import value of $2.44 billion or a share of 22.2 percent to the total imports. This was followed by mineral fuels, lubricants and related materials with $2.06 billion and transport equipment with $890.00 million.