The Philippines recorded a trade deficit of $5.09 billion in September, marking its widest trade gap in 20 months, the Philippine Statistics Authority (PSA) reported Wednesday. The deficit increased by 43.4% from $3.55 billion a year ago and rose 15.8% month-on-month from August’s $4.39 billion. This prolonged negative trade balance reflects the country’s 112th consecutive month in the red since the last trade surplus in May 2015.
The growing trade gap is largely attributed to the sluggish performance of exports, which fell 7.6% year-on-year to $6.26 billion in September, the sharpest decline since June. By contrast, imports climbed 9.9% to $11.34 billion, driven by higher demand for capital goods, raw materials, and consumer goods ahead of the holiday season.
Weak Export Growth Signals Global Slowdown Impact
Economists attribute the decline in exports to broader economic challenges affecting global trade. “The global economy isn’t performing robustly, which has led to decreased demand for our exports,” said Diwa C. Guinigundo of GlobalSource Country Analysts. Electronics, which make up a significant portion of the Philippines’ exports, saw a 23.1% year-on-year drop to $3.15 billion in September. Semiconductor exports, in particular, fell by 30.6%, adding to the downward pressure.
The United States remained the Philippines’ top export destination, with shipments worth $1.08 billion, or 17.3% of total exports. Hong Kong, Japan, China, and South Korea also ranked among the top markets for Philippine goods.
Surging Imports Ahead of Holidays Fuel Trade Gap
While exports struggled, the value of imports surged in response to increased demand for holiday-driven consumer goods and essential raw materials. Raw materials and intermediate goods rose by 19.5% to $4.33 billion, while consumer goods jumped 20.6% to $2.56 billion. Electronic products topped the import list, valued at $2.4 billion, a year-on-year increase of 8.9%.
China was the largest supplier of imported goods, accounting for 25% of total imports, followed by Indonesia, Japan, and the United States.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted that the recent peso strengthening to P56.03 per dollar at September’s end made imports relatively cheaper for local buyers, further contributing to the deficit. However, he suggested that the approaching holiday season could stimulate both imports and exports.
For the coming months, Ricafort forecasts that a weaker peso may boost export competitiveness, though the high import demand could persist due to holiday preparations.
Jaja has a degree in journalism and took classes in international law and business communication. Her career spans roles at prominent international media outlets, including International Business Times, Celebeat and Delightful Philippines. As a news editor, Jaja covered a wide range of beats, including legal, business, economy, cryptocurrency, personal finance, gaming, technology, and entertainment.