By Beatriz Marie D. Cruz, Senior Reporter
THE PHILIPPINES’ trade-in-goods deficit ballooned to $5.15 billion in September, as exports surged at the fastest pace in five years, thanks to a weak peso and strong demand for semiconductors.
Preliminary data from the Philippine Statistics Authority (PSA) showed that the country’s trade-in-goods balance — the difference between exports and imports — widened to a $5.15-billion deficit in September, from the $4.67 billion recorded last year.
Month on month, the trade gap ballooned by 20.06% from the $4.3 billion recorded in August.
The September trade gap was the widest since the $6.35-billion deficit recorded in July, according to PSA data.
The country’s trade balance has been in deficit in over a decade or since the $64.95-million surplus recorded in May 2015.
Merchandise exports in September soared by 35.6% to $9.87 billion, faster than the 16.3% growth in the same month a year ago and the 28.3% in August.
September export growth is highest since the 74.23% jump recorded in April 2021.
PSA data also showed imports jumped by 25.7% to $15.03 billion in September, picking up from 5.2% in the same month last year and the 20.9% in August.
The value of imports and exports in September was both the highest recorded since the series began in 1991.
Chinabank Research said the record-high exports in September were mainly driven by semiconductors.
“While robust AI-related investment supports chip demand, the current upcycle may eventually moderate,” it said in a commentary.
Chinabank Research also noted that the faster import growth widened the trade deficit, which is adding to external pressures and potential depreciation pressures on the Philippine peso.
The wider trade gap could be linked to the weaker peso, which drove up the domestic cost of imported fuel and raw materials, said Francisco Cid L. Terosa, an associate professor and former dean of the School of Economics of the University of Asia and the Pacific (UA&P).
“The weakness of the Philippine peso against the US dollar increased the domestic cost of imported fuel and raw materials,” he said in an e-mailed reply to questions.
In the first nine months of the year, the trade gap widened by 25.53% to $47.16 billion from $37.57 billion.
From the January-September period, imports jumped by 20.33% to $121.11 billion from $100.65 billion last year.
Exports climbed by 17.23% to $73.95 billion from the $63.08 billion recorded in the same period last year.
The Development Budget Coordination Committee projects exports and imports to grow by 3% and 5%, respectively, this year.
ELECTRONICS DEMAND
Electronic goods, which accounted for 70.1% of exports in September, jumped by 72% to $6.92 billion.
Semiconductor exports, which made up the bulk of electronic products, soared by 86.1% to $5.68 billion in September.
Mineral products, which accounted for 3.4% of September exports, dropped by 20.7% to $333.93 million.
Chinabank Research noted the surge in semiconductors masked weakness in other export products.
“Outside semiconductors, however, export performance remained weak, with declines in agricultural products, particularly coconut and pineapples, mineral products, and other manufactured goods,” it said.
Chinabank Research noted that chip demand is driven by artificial intelligence (AI) investments, but warned it could eventually moderate.
“Although the timing of a potential downturn is difficult to predict, the Philippines’ reliance on semiconductor exports leaves it vulnerable to shifts in global technology investment,” it said.
To sustain export growth, the country should diversify into higher-value manufacturing and other competitive industries, Chinabank Research said.
The United States remained the top destination of Philippine-made goods in September, valued at $2.63 billion or 26.6% of the total.
This was followed by Hong Kong with $1.55 billion (15.7%); China with $1.12 billion (11.3%), Vietnam with $785.15 million (8%), and Japan with $619.17 million (6.3%).
IMPORTS
Meanwhile, imports of raw materials and intermediate goods surged by 56.8% to $6.71 billion, accounting for 44.6% of the total in September.
Imports of capital goods inched up by 1.4% $3.93 billion, making up 26.1% of the September import bill.
By commodity group, electronic imports jumped by 87.4% to $5.8 billion in September from $3.09 billion last year.
Semiconductor imports, which accounted for 32.2% of imported electronic goods, more than doubled to $4.85 billion in September.
Imports of mineral fuels, lubricants and related materials rose by 53.3% to $1.97 billion in September, reflecting elevated energy prices amid the Middle East war.
Chinabank Research said the growth in imports was driven mainly by essential goods, particularly key agricultural inputs, food items and fuel.
It noted that the 1.4% increase in imports of capital goods may indicate “subdued investment demand.”
“Consumer goods imports contracted 4.2% for a second consecutive month, suggesting continued weakness in household spending. Durable goods declined after three months of growth, as passenger car and motor vehicle imports pulled back from their sharp increases since June,” Chinabank Research said.
South Korea was the top source of imported goods in September at $3.92 billion (26.1% of the total), overtaking China ($3.36 billion, 22.3% of the total).
Indonesia followed with $994.43 million (6.6%) in imports, Japan with $952.13 million (6.3%), and the United States with $744.66 million (5%).
