The country’s solid macroeconomic fundamentals supported a gradual recovery in trade despite the onslaught of the COVID-10 pandemic, the Department of Finance said over the weekend.
It said in an economic bulletin that total merchandise trade dropped nearly 60 percent in April at the height of the enhanced community quarantine to $6.2 billion from $15.1 billion in the same month last year.
Merchandise trade partially recovered in the subsequent months, reflecting the gradual and calibrated reopening of the economy. Total trade declined by 35.3 percent in May, 18.7 percent in June and 18.6 percent in July.
“This recovery in trade is also seen in the improvement in the manufacturing PMI of recent months from the low of 31.6 in April to 47.3 in August,” it said.
“Good macroeconomic fundamentals have cushioned the impact of the coronavirus pandemic. A prudent, calibrated reopening of key sectors of the economy will be key to the recovery of the economy in general and trade in particular,” the DOF said.
It said economic reforms should be adopted by the government, in addition to the “Build, Build, Build” infrastructure program to attract more investments.
These reforms include the Corporate Recovery and Tax Incentives for Enterprises Act, Financial Institutions Strategic Transfer and amendments to the Commonwealth-era Public Service Act and the Retail Trade Liberalization Act.
The department said these measure could “help the country weather and recover from the impacts of the coronavirus pandemic. Furthermore, improvements in ease of doing business improvements will also be important in adapting to the new normal.”
Trade deficit in July shrank by 49.8 percent to $1.827 billion from a shortfall of $3.64 billion a year ago, following the 9.6-percent decline in exports and a bigger 24.4-percent drop in imports.
This brought the cumulative trade deficit in the first seven months to $12.501 billion, down from the $24.065-billion shortfall in the same period last year.