Economy starts to pick up after trade contraction in May–NEDA

The country’s external trade performance continued to take a beating as data from the Philippine Statistics Authority (PSA) showed exports and imports growth continued to contract in May 2020.

Based on the preliminary data released by the PSA on Friday, exports contracted 35.6 percent while imports declined 40.6 percent in May 2020.

Total trade, meanwhile, contracted 38.7 percent and the country’s trade deficit contracted 48.9 percent in May 2020.

“The slower decline in trade performance is a welcome indication that economic activity has started to pick up with the relaxation of quarantine measures in certain areas, the gradual reopening of business, and the restarting of production in both the country and its trading partners,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said in an #AskNeda briefing on Friday.

Data showed that the contraction in exports was not as deep as the 49.9 percent posted in April 2020. However, this remained lower than the 1.8-percent growth it posted in May 2019.

PSA data showed export earnings decreased to $3.99 billion from the $6.20 billion total export generated in May 2019. The year-on-year contraction in May 2020 was the third month that total exports was consecutively declined this year.

In the previous month, export value fell at an annual rate of 49.9 percent while in May 2019, it gained at a rate of 1.8 percent.

Chua said, however, that the country’s export performance will continue to improve as manufactured goods, which account for 80 percent of total exports, is expected to recover.

He said the latest results of the Purchasing Managers’ Index (PMI) for the Philippines rose from 40.1 in May to 49.7 in June.

“The Semiconductors and Electronics Industries in the Philippines Inc. [SEIPI] also indicated a gradual pick-up in semiconductor exports in the coming months and projected a flat growth in 2020, notwithstanding the on-going lockdown in Cebu where some of the electronics firms are located,” Chua said.

In terms of imports, PSA data showed the country’s import bill declined to $5.85 billion in May 2020 and $9.85 billion in May 2019.

PSA said the contraction in May was the second-highest annual drop since decreases were observed beginning May 2019.

In the previous month, the decline was higher at 65.3 percent while in May 2019, imports decreased by 1.2 percent annually.

“Although still negative compared to last year, this represents slight improvements compared to last month,” Chua said.

The PSA noted that the import value for personal protective equipment (PPE), and medical supplies in May 2020 amounted to $32 million, indicating an annual increase of 64.9 percent.

Slower annual growths of imported values for these medical items were lower in the previous month at 54.1 percent and in May 2019 at 39.1 percent.

Trade partners

PSA data showed the country’s top export markets was led by Japan which accounted for 18.3 percent of the total, or $731.89 million. However, this represented a 15.6-percent contraction from $867.05 million in May 2019.

Other top export destinations were Hong Kong with export value of $658.76 million, or 16.5 of the total; People’s Republic of China, $599.14 million, or 15; US, $484.25 million, or 12.1 percent; and Singapore, $295.55 million, or 7.4 percent.

In terms of import sources, China was the country’s biggest supplier of imported goods in May 2020 with a 21.5-percent share of total import receipts.

Import value from this country amounted to $1.26 billion during the month, a 42.99-percent decline from $2.21 billion in May 2019.

The other major import trading partners were Republic of Korea with an import value of $662.85 million or 11.3 percent of the total; US, $540.98 million or 9.2 percent; Japan, $481.48 million or 8.2 percent; and Singapore, $350.02 million or 6 percent.

1 comment
Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related Posts