Surprise export growth lifts foreign trade in September

MANILA, Philippines — Foreign trade climbed up in September as exports picked up amid a growing import bill, resulting in a smaller trade deficit.

The Philippines’ external trade grew 11.3% year-on-year to $19.14 billion in September, data from the Philippine Statistics Authority released Friday showed. This was slower compared to the 15% annual growth rate in August. 

Broken down, exports rebounded 7% year-on-year to $7.16 billion in September. The country’s top export, electronic products, improved 19.3% annually to $4.51 billion in the same period.

Imports grew at a slower clip of 14.1% year-on-year to $11.98 billion in September as fuel shipments proved persistently expensive. 

The country’s trade deficit, which occurs when imports bill outgrows export sales, totaled $4.82 billion in September, narrowing 20% compared to the previous month. The trade gap widened 26.5% on an annual basis.

Sought for comment, Nicholas Antonio Mapa, senior economist at ING Bank in Manila, said the pick-up in exports was unexpected. 

“Exports rose 7%YoY bolstered by the jump in its mainstay electronics subsector (19.3%).  This was more than enough to offset the contraction posted for articles of apparel, furniture and agro-based products,” he said in an emailed commentary. 

Mapa attributed the gains in electronic exports to new model releases of smartphones and consumer tech since partner trade countries require some components assembled in the country. 

On the other, he described the growth of the imports bill as “outsized” owing to base effects and should expect the figures to normalize in the coming months. Mapa projected the trade deficit to keep its current size but won’t balloon to record-highs.

“The surprise pickup in exports coupled with imports normalizing helped the trade deficit come off from recent record levels. In the coming months we could see the trade deficit remain wide but not likely revisit the recent record of $6 billion,” Mapa added.