Import contraction cuts Philippine trade deficit in April

MANILA, Philippines — The Philippines posted a smaller trade gap in April, as a stronger peso likely pulled down the country’s import bill while the US tariff-induced global uncertainties helped boost export sales.

The country recorded a merchandise trade deficit of $3.5 billion, narrower by 26.1 percent year-on-year, the Philippine Statistics Authority (PSA) reported on Friday.

This brought the four-month shortfall to $15.9 billion, almost the same as the trade gap a year ago.

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That the country continued to post a trade deficit means it still spent more dollars on imports than it earned from export receipts.

But the milder trade imbalance in April should help improve the country’s external position in the face of heightened global uncertainties due to US President Donald Trump’s erratic trade policies.

Dissecting the PSA’s report, imports fell by 7.2 percent to $10.2 billion, snapping four straight months of growth. Inbound shipments of raw materials sagged by 11 percent while energy imports contracted by 35.1 percent.

Purchases of capital goods that business use to produce their products and services inched up by 6.6 percent while imports of consumer goods increased by 2.8 percent.

Peso appreciation

“One of the factors we can attribute the fall of import value is the appreciation of the peso. This caused import costs to decrease during April,” said Reinielle Matt Erece, an economist at Oikonomia Advisory & Research Inc.

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“We may expect even lower import costs this May as the Philippine peso continues to surge amid stable inflows of dollars with the US dollar’s weakening demand,” Erece added.

Exports, meanwhile, went on a four-month growth streak after expanding by 7 percent to $6.7 billion. But this clip was slower than March’s 8.7 percent after sales of electronic products, the country’s top export, slipped by 4.8 percent.

“The growth in exports on the other hand, may be a sign of US firms front-loading inventory while the tariff pause is in effect,” Erece said.