Trade gap widens to $4.1 billion in March

MANILA, Philippines — The Philippines’ trade deficit widened in March as imports growth outpaced the increase in exports, according to the Philippine Statistics Authority (PSA).

Preliminary data released by the PSA yesterday showed that the balance of trade in goods – the difference between exports and imports – amounted to a $4.13 billion deficit in March, 23 percent higher than the $3.35 billion gap in the same month in 2024.

The shortfall was also wider than the $3.46 billion deficit in February.

Exports of the country’s goods grew by 5.9 percent to $6.59 billion in March from $6.23 billion in the same month last year.

“The relatively higher exports volume could be partly attributed to some frontloading of overseas sales before higher US import tariffs or reciprocal tariffs that increase export selling prices take effect,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said.

The US announced the imposition of reciprocal tariffs on trade partners including the Philippines on April 2.

Hours after the reciprocal tariffs took effect, the US declared a 90-day pause and brought down the levy to 10 percent for most countries to give time for negotiations with trade partners.

Before hitting pause on the tariffs, the US imposed a 17-percent levy on goods coming from the Philippines.

The PSA said commodity groups with the highest increases in exports in March were other manufactured goods ($123.02 million) coconut oil ($105.93 million) and other mineral products ($54.21 million).

Electronic products remained the country’s top export commodity group, accounting for 55.2 percent of the total or $3.64 billion in March, up slightly from $3.61 billion in the same month in 2024.

By trading partner, the US continued to be the biggest market for Philippine exports, accounting for $1.11 billion or 16.8 percent of the total in March.

While exports increased, the country’s imports grew at a faster pace, rising by 11.9 percent to $10.72 billion from $9.58 billion.

Electronic products had the highest imports value, reaching $2.52 billion or 23.5 percent of the total.

China remained the largest supplier of the Philippines’ imported goods valued at $3.10 billion or 28.9 percent of the total in March.

In the first quarter, the trade deficit widened to $12.71 billion from $11.26 billion in the same period last year.

Exports grew by 5.7 percent to $19.27 billion from January to March compared to $18.23 billion in the same period in 2024.

On the other hand, imports reached  $31.98 billion, 8.4-percent higher than last year’s  $29.5 billion.

For the coming months, Ricafort said further rate cuts by the Bangko Sentral ng Pilipinas and US Fed would reduce borrowing costs that would help spur greater global investments and boost trade.

However, US protectionist policies or measures could be a potential drag.

Despite the US’ imposition of reciprocal tariffs on goods coming from trade partners including the Philippines, Department of Economy, Planning and Development Secretary Arsenio Balisacan told reporters that the government is keeping its export targets for now.

“Net export is just one of the components of the national economy,” Balisacan said.

The Development Budget Coordination Committee has set a six percent growth in exports annually for this year until 2028.

While a growing trade deficit could weigh down overall economic growth, Balisacan said imports of materials and equipment to support business operations could signal potential growth in the future.

“So I would not mind a deterioration of trade deficit if the composition of imports is for future expansion,” he said.