PH trade gap widens to $4.13 billion in March 2025

The country’s balance of trade in goods saw a wider deficit in March this year as growth in imports outpaced the increase in exports during the month, the Philippine Statistics Authority (PSA) reported on Wednesday.

Data released by the PSA showed the Philippines' external goods—the difference between the value of exports and imports—stood at a shortfall of $4.127 billion in March, up 23.1% 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.

The total value of imported goods that came into the country amounted to $10.72 billion, up 11.9% from $9.579 billion year-on-year.

Export receipts, meanwhile, grew by 5.9% to $6.593 billion from $6.225 billion in the same month last year.

Combining exports and imports, the country’s total external trade was valued at $17.314billion in March, up 9.6% from $15.804 billion a year ago.

At the sidelines of the Philippine Innovation Week summit in Quezon City, Economic Planning Secretary Arsenio Balisacan said he would not mind a widening trade deficit if the country’s imports “are composed of things businesses would need for operations, capital build up.”

Balisacan said if a country’s imports are mostly raw materials and capital equipment “these are good indications of better growth in the future.”

Imports

In March, PSA data showed that imports of raw materials and intermediate goods accounted for the largest share of the country’s total imports in March amounting to $3.92 billion or 36.5%.

This was followed by capital goods with a share of $3.16 billion or 29.5%, and consumer goods with a value of $2.30 billion or 21.4% share.

Meanwhile, the commodity group with the highest annual increment in the value of imported goods was electronic products at $2.517 billion, up by $500.53 million year-on-year.

This was followed by industrial machinery and equipment, which increased by $137.21 million to $554.87 million; and animal and vegetable oils and fats with an annual increment of $120.31 million to $203.24 million.

The January to March import value amounted to $31.98 billion, up 8.4% from $29.5 billion in the same period in 2024.

PSA data also showed that the People’s Republic of China was the Philippines largest source of imported goods valued at $3.10 billion or 28.9% of the country’s total imports in March.

Completing the top five major import partners of the country in March were the following:

• Indonesia - $888.27 million (8.3%)
• Japan - $834.38 million (7.8%)
• Republic of Korea - $728.94 million (6.8%)
• Thailand - $627.65 million (5.9%)

In a commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that “the faster growth in imports that led to wider trade deficit partly [was] due to stronger peso exchange rate versus the US dollar that made imports cheaper from the point of view of local buyers, as well as relatively lower prices of major global commodity prices.”

Exports

During the month, electronic products remained as the country’s top export with total value of total earnings of. $3.64 billion or 55.2% of the total exports.

It was followed by other manufactured goods with a value of $434.41 million, and other mineral products with $246.56 million share.

The year-to-date annual total value of exports from January to March this year stood at $19.27 billion, up 5.7% from $18.23 billion in January to March 2024.

The United States of America was the country’s top export destination with total value of $1.11 billion, accounting for 16.8% of the total exports during the month.

Completing the top five major export trading partners for the month were:

• Hong Kong - $1.01 billion (15.3%)
• Japan - $960.50 million (14.6%)
• China - $762.78 million (11.6%)
• Singapore - $273.74 million (4.2%)

Ricafort said the “relatively higher exports volume could be partly attributed to some frontloading of overseas sales before higher US import tariffs/reciprocal tariffs that increase export selling prices take effect.” — BM, GMA Integrated News