PH trade gap hits $3.954B in June

The Philippine balance of trade widened month-on-month in June as imports grew while exports declined, data released by the government on Wednesday revealed.

Preliminary data from the Philippine Statistics Authority (PSA) showed that the balance of trade in goods (BoT-G) posted a $3.954-billion deficit in June, wider than the $3.632-billion in May but narrower than the $4.335-billion in June 2024.

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

Exports for the month stood at $7.021 billion, lower than the $7.314 billion in the previous month, but 26.1% higher than the $5.568 billion in June 2024.

Manufactured goods accounted for $5.53 billion or 78.8% of total exports, followed by mineral products with $723.92 million or 10.3%, and total agro-based products with $586.58 million or 8.4%.

Shipments to the United States accounted for $1.21 billion or 17.3%, followed by Hong Kong with $1.07 billion or 15.2%, Japan with $974.80 million or 13.9%, China with $733.99 million or 10.5%, and Singapore with $311.96 million or 4.4%.

Imports for the month were recorded at $10.975 billion, up from $10.946 billion in May, and 10.8% from $9.904 billion in June 2024.

Electronic products had the biggest share with $2.56 billion or 23.3%, followed by mineral fuels, lubricants, and related materials with $1.40 billion or 12.8%, and transport equipment with $1.32 billion or 12.0%.

In terms of major type of goods, capital goods had the biggest share with $3.71 billion or 33.8%, raw materials and intermediate goods with $3.67 billion, and consumer goods with $2.15 billion or 19.6%.

China was the biggest supplier of imported goods with $3.10 billion or 28.2%. Japan followed with $870.15 million or 7.9%, South Korea with $853.26 million or 7.8%, Indonesia with $840.21 million or 7.7%, and Thailand with $626.93 million or 5.7%.

Total trade for the month was recorded at $17.996 billion, down from $18.261 billion in May but up from $15.472 billion in June 2024.

“The markets priced in possible Trump’s higher US import tariffs, reciprocal tariffs, trade wars, and other protectionist policies,” Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said in a commentary.

Moving forward, Ricafort said global trade is expected to slow in the coming months given Trump’s trade policies.

“Trump’s higher US import tariffs/reciprocal tariffs/other protectionist measures could slow down global trade, investments, employment, other business/economic activities, and overall world economic or GDP growth,” he said.

Last week, US President Donald Trump announced a new 19% tariff rate for Philippine goods. This is lower than the 20% announced in a letter earlier this month but higher than the 17% rate announced during the Liberation Day Tariffs in April.

Posting on his Truth Social media platform, Trump initially said the Philippines was going to open the market with the US with zero tariffs, while the Philippines would pay a 19% tariff.

President Ferdinand “Bongbong” Marcos Jr., who had a meeting with Trump before the 19% rate was announced, has since clarified that the zero tariffs on US products would only apply to certain markets such as automobiles.

Finance Secretary Ralph Recto on Tuesday said the country could see up to P6 billion in foregone revenues from the markets it will open up to the US with zero tariffs, including cars, wheat, pharmaceuticals, and soybeans.

Economists earlier said the latest agreement will only have a limited impact on the country’s economy given its low dependence on American demand compared with other Asian economies, with local exporters bearing the brunt. —VBL, GMA Integrated News