Trade surplus plunges 44% to $764M in Jan-May

The country’s merchandise trade surplus plunged 44 percent to $764 million in the first five months of the year from $1.364 billion in the same period last year as exports continued to drop due to weak demand from the country’s major trading partners

The National Statistics Office (NSO) reported yesterday that export earnings for the five-month period tumbled by 5.6 percent to $13.410 billion from $14.206 billion in the same period last year.

Imports were also on the downtrend, albeit at a slower pace of 1.5 percent to $12.646 billion in January to May from $12.841 billion a year ago.

For May alone, imports increased to $2.681 billion, or a 10-percent hike from $2.437 billion a year ago. It was the second consecutive month that import payments were up.

The recovery in imports was seen as an indication that exports may also recover soon. "The hike in May imports may indicate that exports may also recover soon," said Vincent Lazatin, vice president of Wordlwide Investment Management Co. of the Philippines.

The country’s imports are mostly of goods used as inputs in the export sector and any rise is seen as a positive development.

Earlier, Trade and Industry Secretary Manuel Roxas II said he expects export growth to be flat this year from an 8.7 percent rise in 2000, due to a slowdown in demand from the country’s main trading partners, the US and Japan.

Analysts, however, said exports were likely to contract by 10 to 12 percent this year due to a slump in demand for electronic components which accounted for more than half of the country’s total shipments abroad.

Among the country’s major imports, payments for electronic and components went up by 12.5 percent to $553.93 million in May from $492.60 million in the same period last year.

Purchases of telecommunication equipment and electrical machinery went up by 4.5 percent to $287.12 million from last year’s $274.65 million.

Payments for mineral fuels, lubricants and related materials were the third biggest at $273.54 million, or a 6.6 percent hike from last year’s $292.70 million.

Other top imports for May were: office and EDP machines, $181.05 million; industrial machinery and equipment, $131.42 million; textile yarn and fabrics, $110.90 million; imported materials, $105.47 million; and iron and steel, $83.73 million.