Trade deficit widens to $3.99 billion in September — PSA

The country’s external trade performance in September saw a wider deficit as growth in imports continued to outpace exports during the period, data released by the Philippine Statistics Authority (PSA) showed Friday.

Preliminary data showed that the Philippines’ balance of trade in goods deficit widened to $3.995 billion in September, up 76.3% from $2.266 billion in the same month in 2020.

September’s trade gap is also wider than the $3.509-billion deficit recorded in August.

Total trade — the summation of the country’s external trade in goods — amounted to $17.35 billion, up 16.9% from $14.838 billion year-on-year.

A deficit indicates that the value of a country's imports exceeded export receipts, while a surplus indicates more export shipments than imports.

Imports grew 24.8% year-on-year to $10.67 billion due to “the increase in all the top 10 major commodity groups which was led by mineral fuels, lubricants and related materials with 117.4% increase,” the PSA said.

“This was followed by medicinal and pharmaceutical products (105.8%); and iron and steel (67.1%),” according to the PSA.

China was the country’s biggest supplier of imported goods valued at $2.33 billion or 21.8% of the total imports in September.

Completing the top five major import trading partners were Japan with $970.65 million or 9.1% share to total imports, South Korea with $862.61 million or 8.1% share, Indonesia with $810.96 million or 7.6% contribution, and the United States, which accounted for $659.5 million or 6.2%.

Exports, meanwhile, rose 6.3% to $6.68 billion as seven of the top 10 commodity groups in terms of the value of exports recorded annual increases led by chemicals at 55.4%, followed by gold at 44.3%, and cathodes and sections of cathodes, of refined copper at 39.8%.

Exports to the US amounted to $1.17 billion or a share of 17.5% to the total exports during the month.

The US was followed by China with exports amounting to $1.05 billion or 15.7% share, Japan with $936.63 million or 14% share, Hong Kong with $917.19 million or 13.7%, and Singapore with $402.58 million or 6% share.

According to Rizal Commercial Banking Corp. chief economist Michael Ricafort, Philippine external trade for September “has been a bright spot for the Philippine economy despite the challenges brought about by the COVID-19 pandemic, with both exports and imports recently hovered among record high levels on a monthly basis.”

“The continued recovery of both exports and imports, both near record high levels in US dollar terms on a monthly basis, partly reflects the recovery of local manufacturing gauges already nearing pre-COVID levels and FDIs (foreign direct investments) among the highest even before the pandemic, thereby would help create more jobs/employment, as an important bright spot in the economy and also an important pillar for the country's economic recovery program,” Ricafort said in an emailed commentary. — VBL, GMA News