THE Philippines’s full year export and import growth targets may still be attainable if the country’s external trade performance posts a double-digit growth in the next six months, according to local economists.
On Tuesday, the Philippine Statistics Authority (PSA) said the country’s export earnings contracted 9.3 percent in the first semester of 2023 while import receipts declined 8 percent during the period.
The country’s full year target, according to the latest pronouncement from the Development Budget Coordination Committee (DBCC), is to grow exports by 1 percent and imports by 2 percent this year.
“Mathematically, both exports and imports need to grow by more than 10 percent for the rest of 2023 to achieve the said targets,” Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael L. Ricafort told the BusinessMirror.
In June 2023, exports managed to post a growth of 0.8 percent while imports contracted 15.2 percent during the period. Exports grew 2.4 percent while imports contracted 8.1 percent in May 2023.
Ricafort said this partly reflects the “risk of recession in the United States and softer economic conditions/recovery in China.” However, he said the country’s external trade targets remain attainable.
“United States Federal Reserve Chair [Jerome] Powell already signaled recently that the Fed staff are no longer forecasting [a] US recession,” Ricafort said. “So global trade, including Philippine exports and imports, could pick up.”
De La Salle University economist Maria Ella Oplas said a double-digit growth in exports and imports would be attainable because of the national government’s public infrastructure program.
Another factor seen boosting the country’s external trade performance is higher household consumption driven by the holiday season. “We are about to enter the ‘ber’ months [when] demand is heightened during those times. We should expect a kick in trade,” Oplas said.
PSA said the country’s total external trade in goods amounted to $17.32 billion, which indicates an annual decline of 9.6 percent from its level of $19.17 billion in the same period of the previous year.
In May 2023, its annual decrease was recorded at 4.4 percent, while in June 2022, it expanded at an annual rate of 16.3 percent.
Of the total external trade in June 2023, PSA said 61.3 percent were imported goods, while the rest were exported goods.
The balance of trade in goods (BoT-G) is the difference between the value of exports and imports. The BoT-G in June 2023 amounted to $3.92 billion, indicating a trade deficit with an annual decrease of 33.3 percent.
In May 2023, the trade deficit recorded a contraction of 20.1 percent and in June 2022, it posted an annual increase of 76.6 percent.
The country’s top exports were electronic products, with total earnings of $3.94 billion or 58.8 percent of the country’s total exports during the period.
This was followed by other manufactured goods with an export value of $350.27 million or a 5.2-percent share of total exports; and other mineral products, which amounted to $300.81 million or 4.5 percent of the total.
The country’s top export market was the United States with $1.12 billion or a share of 16.7 percent of the country’s total exports in June 2023.
Other top markets were the People’s Republic of China which accounted for $999.19 million or 14.9 percent of total export earnings; Hong Kong, $957.88 million or 14.3 percent; Japan, $945.52 million or 14.1 percent; and Republic of Korea, $335.08 million or 5 percent of the total.
Meanwhile, in terms of imports, the commodity that accounted for the largest amount of import receipts was electronic products, which amounted to $2.11 billion or a share of 19.9 percent to the country’s total imports.
This was followed by mineral fuels, lubricants and related materials at $1.53 billion with a share of 14.4 percent of the total; and transport equipment at $1.23 billion or 11.6 percent.
In terms of sources, the People’s Republic of China was the country’s biggest supplier of imported goods valued at $2.38 billion or 22.4 percent of the country’s total imports in June 2023.
Other major import trading partners for June were Indonesia which cornered $1.04 billion or 9.8 percent of import receipts; Japan, $841.75 million or 7.9 percent; Singapore, $762.33 million or 7.2 percent; and USA, $696.28 million or 6.6 percent.
Image credits: Qilai Shen/Bloomberg