AS the world continued to grapple with the slowdown in global trade, the country’s export earnings and import receipts posted their slowest growth since last year, according to preliminary data released by the Philippine Statistics Authority (PSA).
Based on the PSA data, the country’s exports grew 6 percent year-on-year in April 2022, the slowest since October 2021 when earnings only grew 2 percent. Import receipts, meanwhile, rose by 22.8 percent, the slowest since March 2021 when import growth reached 22.1 percent.
However, the Department of Trade and Industry (DTI), citing data from the PSA, said the April 2022 export data was estimated to be 14.5 percent higher than the prepandemic average from 2017 to 2019. Trade Secretary Ramon Lopez attributed this to the growth of the country’s Purchasing Managers Index (PMI).
“The continuous growth of our PMI is a testament to the efficiency of post-pandemic economic recovery efforts implemented by the Duterte administration. There were several aspects that contributed to this development, but central to this is really the solid growth of outputs, resulting in our sustained exports performance,” Lopez said in a statement.
The country’s trade deficit also increased 54.1 percent to 4.77 billion in April 2022. The trade deficit in March recorded an annual increase of 81.5 percent while in April 2021, it was at 1,555.8 percent.
The trade deficit is measured as the Balance of trade in goods (BoT-G), which is the difference between the value of exports and imports.
The country’s exports posted an average growth of 8.9 percent in the January to April 2022 period while imports posted an increase of 26.7 percent in the first four months of the year.
Commodity groups
“[Some] 32 out of 48 Philippine commodity groups continue to drive the recovery of the country’s export sector, registering consistent increases in export sales compared to three time periods: 2021, 2020, and pre-pandemic average over 2017-2019,” DTI, meanwhile, said.
This development was particularly driven by electronics —including Other electronics—Other mineral products, copper cathodes and sections of cathodes, coconut oil and chemicals.
“Electronics remain to be the country’s biggest export, accounting for 59.8 percent year-to-date [YTD] of total exports in January-April. Likewise, double-digit growth rates were recorded in the Philippine electronics exports of components/devices [semiconductors], control and instrumentation, and automotive electronics,” according to DTI.
Moreover, exports of telecommunication products have more than tripled in April 2022, based on both year-on-year and year-to-date values.
Of the $348-million additional exports in April 2022, coconut products contributed $164 million or 47 percent of the incremental export sales for the month.
The DTI said in its statement that this was “primarily driven by exports of coconut oil which grew 2.5 times its export level compared to last year. Since February 2021, exports of coconut oil have been increasing at double-digit growth rates.”
In the first quarter of 2022, export sales went up by $2.1 billion compared to the same period last year. Further, a quarter of these incremental exports consists of sales of coconut products. In total, exports increased by 8.9 percent to $25.6 billion from $23.5 billion in 2021.
“The Philippines is recognized as one of the global leaders in the coconut industry. With the approval of [Coconut Farmers and Industry Development Plan] CFIDP, our local coconut industry, particularly our farmers, can benefit from government support programs that will allow the sector to strengthen its competitiveness through the development and promotion of more innovative coconut-based products,” said Trade Secretary Ramon M. Lopez.
On June 2, President Duterte signed the CFIDP by issuing Executive Order No. 172. DTI said the CFIDP aims to increase overall productivity and income of coconut farmers, alleviate poverty, and modernize and rehabilitate the coconut industry to attain social equity.
Besides the support provided by the CFIDP, the coconut industry will also benefit from export marketing support under the Philippines-European Union (EU) ARISE Plus Project implemented by the International Trade Centre (ITC) and the DTI-Export Marketing Bureau (EMB).
Under this Project coconut exporters will obtain market research assistance, capacity-building programs focused on sales negotiations, digital marketing and branding, and market linkages through participation in trade fairs and business matching activities.
Markets
The People’s Republic of China was the country’s top trade partner for April 2022. It accounted for the largest chunk of the country’s total exports and imports for the month. In a recent briefing, World Bank Philippines Senior Economist Kevin Chua cited the slowdown in China among the primary risks to the Philippine economy.
The slowdown in one of the world’s largest economies, Chua said, has already disrupted global trade and the supply chain.
“China’s structural slowdown and regulatory response to Covid-19 are disrupting global trade and supply chain. China’s slowdown adversely impacts the Philippines as its trade is increasingly oriented towards the Chinese markets,” Chua said.
Based on the latest trade data, China comprised the highest export value of $971.74 million, or a share of 15.9 percent to the total exports during the month.
Other top export markets for the Philippines were the United States of America (USA) which accounted for 15.6 percent of total exports or $955.17 million; Japan, 13.4 percent of the total or $820.96 million; Hong Kong, 12.1 percent of the total or $740.58 million; and Singapore, 6.9 percent of $419.82 million of total shipments.
In terms of imports, China was the country’s biggest supplier, with shipments worth $2.27 billion or 20.8 percent of total imports in April 2022.
Other top import sources were the Republic of Korea which accounted for $1.20 billion or 11.1 percent of total, followed by Indonesia with $1.01 billion or 9.3 percent; Japan, $922.55 million or 8.5 percent; and Singapore, $741.51 million or 6.8 percent.
Export and import trade statistics are compiled by the PSA from export and import documents submitted to the Bureau of Customs (BOC) by exporters and importers or their authorized representatives as required by law.
Image credits: Qilai Shen/Bloomberg