Credit to Author: Anna Leah E. Gonzales| Date: Wed, 05 Aug 2020 16:28:34 +0000
The country’s trade deficit shrank to $1.30 billion in June from a month and a year earlier as exports and imports continued to fall by double digits, the Philippine Statistics Authority (PSA) reported on Wednesday.
Data from the statistics agency showed that the gap was 1.5 percent and 50.6 percent smaller than the $1.32 billion and $2.63 billion recorded in May and June 2019, respectively.
A deficit is recorded when the value of imports is greater than that of exports, while a surplus is registered when it’s the other way around.
The value of outbound shipments hit $5.33 billion in June, down 13.3 percent from the year-earlier $6.15 billion, while that of inbound shipments reached $6.63 billion, a 24.5-percent drop from $8.78 billion year-on-year.
These declines, however, were slower than May’s 26.9 percent for exports and 40.6 percent for imports.
The decrease in exports was attributed to the decline in eight commodity groups, led by metal components at -30.5 percent; coconut oil, -29.7 percent; and machinery and transport equipment, -26.3 percent.
Those in imports was blamed on the decreases in seven import commodities, led by transport equipment at -70.5 percent; mineral fuels, lubricants and related materials, -56.9 percent; and iron and steel, -40.9 percent.
Total external trade in goods amounted to $11.97 billion, a 19.9-percent slide from $14.9 billion in the same month last year, but higher than the $10.3 billion in May.
In a statement, Acting Socieconomic Planning Secretary Karl Kendrick Chua said the “slower decline in the country’s trade performance signals the resumption of economic activities.”
He noted, however, that the reimplemention of a modified enhanced community quarantine (MECQ) in Metro Manila and the provinces of Bulacan, Cavite, Laguna and Rizal would affect businesses and employees for a limited time, as certain sectors need to scale back or suspend their operations in compliance with the altered lockdown.
“The two-week MECQ will allow the government to reassess approaches, procedures and response protocols and capacities that may need to be improved to better contain the spread of the [coronavirus disease 2019] while ensuring that the gains from reopening the economy are not fully reversed,” he explained.
According to him, the Philippines must remain watchful of the economic contraction in other countries, especially those in Southeast Asia.
“As [Southeast Asian] countries account for more than 15 percent of the country’s total exports, the contraction in these countries’ GDP (gross domestic product) would need to be closely watched as [a] further drop in their economies could affect trade flows and may reverse the improvements in trade observed during the period,” Chua said.