Philippine trade deficit narrows in October on surprise export growth

MANILA, Philippines — The Philippines’ trade gap narrowed in October after a surprise exports growth tempered surging imports.

Trade deficit, which occurs when the country’s imports bill outgrows export sales, expanded 13.5% year-on-year to $3.31 billion in October. This, however, was smaller by 31.73% compared to the previous month’s gap, data released by the Philippine Statistics Authority on Tuesday showed.

The country’s external trade grew 12.3% year-on-year to $18.7 billion in October. This was faster compared to the 11.5% annual growth rate in September. 

Broken down, exports improved 20% year-on-year to $7.7 billion in October. Outbound shipments of electronic products, the country’s top export product, rose 39.6% annually to $5.1 billion in October. 

Imports expanded 7.5% compared with a year ago to $11 billion in October on the back of higher inbound shipments of electronic products and costlier oil imports.

Sought for comment, Nicholas Antonio Mapa, senior economist at ING Bank in Manila, noted that the increased exports could prove temporary. 

“Exports got a boost from mainstay electronics although we warn that this rise may be temporary given expectations for slower shipments in the coming months due to global slowdown,” he said in a Viber message. 

Mapa added that imports growth on the other hand were driven by energy imports and consumer demand.

“However, investment related items like capital goods contracted while raw materials saw modest gains suggesting that investment momentum lacks significant momentum,” he explained. 

A commentary from China Banking Corp. said exports in October “surprised on the upside” since this was the fastest since June 2021.