Trade deficit widens to $5.97 billion in July

MANILA, Philippines — The Philippines posted a wider trade gap in July from a year ago as imports grew at a faster pace than exports.

Preliminary data from the Philippine Statistics Authority (PSA) showed that the balance of trade in goods – the difference between the value of exports and imports – amounted to a $5.97-billion deficit in July, 35 percent higher than the $4.43-billion shortfall in the same month last year.

The July trade deficit was also wider than the previous month’s $5.5-billion trade gap.

Last month’s trade deficit was the highest since the $6.1 billion posted in May.

The country’s exports of goods rose by 11 percent  to $8.15 billion in July from $7.36 billion a year ago.

Despite the double-digit growth, the July exports value was the lowest since the $7.95 billion registered in May.

Electronic products remained the country’s top export commodity group in July, with total earnings accounting for 59 percent of total exports.

In particular, electronic products surged by 22 percent to $4.79 billion in July from $3.92 billion in the same month last year.

The United States remained the top destination for Philippine exports, with $1.68 billion or a 21-percent share of total exports in July.

Meanwhile, goods imported by the country posted a 20-percent increase to $14.12 billion in July from $11.79 billion in the same month last year.

The July import value was also the lowest recorded since May’s $14.05 billion.

Electronic products posted the highest import value in July at $4.6 billion, accounting for 33 percent of the total. 

In terms of trade partners, China remained the largest source of Philippine imports, accounting for  $4.17 billion or 30 percent of the total in July. 

From January to July, the country’s trade deficit ballooned by 29 percent to $37.34 billion from $28.91 billion in the same period last year.

Exports went up by 13 percent to $54.92 billion during the seven-month period from $48.67 billion in the same period last year. 

“The year-to-date total value of exports was the highest recorded since the series began in 1991,” the PSA said.

Total imports climbed by 19 percent to $92.26 billion from $77.58 billion in the same period last year. 

“The total import value from January to July 2026 was the highest recorded since the series began in 1991,” the PSA added.

Commenting on the data, Chinabank Research said that while the electronics sector is driving export growth, its heavy reliance on imported components is also widening the country’s trade deficit.

Chinabank Research also pointed out that electronic inputs are now rivaling oil as a major import item.

“The global AI (artificial intelligence) boom presents an opportunity to deepen local manufacturing and move up the value chain, allowing the Philippines to capture more of the gains for the electronics upcycle,” it said.

 However, it flagged a new round of semiconductor tariffs by US President Donald Trump as a potential risk.

 “Any measures are likely to remain targeted and should have only a limited impact on the Philippine industry,” it said.