The trade deficit widened 75.4 percent in June to a record $5.84 billion from $3.33 billion a year ago, as monthly imports reached an all-time high on higher oil prices and amid the geopolitical tension in Eastern Europe, the Philippine Statistics Authority said Tuesday.
The June trade deficit was also higher by 5.2 percent than the $5.56-billion shortfall in May. The latest data brought the first-half trade deficit to $29.793 billion, up 66 percent from the shortfall of $17.953 billion in the same period last year.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the record-high trade deficit in June was “bloated by elevated prices of global oil and other commodities imported by the country largely brought about by the Russia-Ukraine war since February 24, 2022.”
Ricafort said the pickup in imports and economic activities as the economy re-opened towards greater normalcy contributed to the increase in trade deficit.
“This partly weighed on the peso exchange rate in recent months [matching the record high of 56.45 posted on July 12 and 14, 2022] but already improved to the strongest in more than a month at 55.50 levels recently,” he said.
“However, trade deficit and imports, as bloated by elevated global commodity prices, could ease in the coming months, after global crude oil, wheat and other commodity prices already erased all the increase since the Russia-Ukraine war started on Feb. 24, 2022, thereby could also help support/stabilize the peso exchange rate as well,” Ricafort said.
Exports rose 1 percent in June to a three-month high of $6.643 billion from $6.576 billion a year ago. Cumulative export earnings amounted to $38.53 billion, up 7.1 percent from the same period last year.
Electronic products continued to be the country’s top export in June with total earnings of $3.52 billion. This accounted for 53 percent of the total exports during the period.
Other top exports during the month were other mineral products with an export value of $486.90 million (7.3 percent); other manufactured goods, which amounted to $349.01 million (5.3 percent).
Imports jumped 26 percent in June to a record $12.49 billion.
“The annual growth in the value of imported goods in June 2022 was mainly due to the increase in value of nine of the top 10 major commodity groups which was led by mineral fuels, lubricants, and related materials with 125.1 percent. This was followed by iron and steel, which rose by 34.3 percent annually; and telecommunication equipment and electrical machinery by 23.1 percent,” the PSA said.
Imports in the first six months rose 26.7 percent to $68.32 billion from $53.93 billion a year ago.
Most of the imported goods were electronic products with an import value of $2.87 billion or a share of 22.9 percent to the total imports in June.
This was followed by mineral fuels, lubricants, and related materials valued at $2.64 billion (21.2 percent); and transport equipment, which amounted to $878.27 million (7.0 percent).
The trade deficit hit $42.229 billion in 2021, higher than the $24.59-billion shortfall in 2020. The country posted a record $43.5-billion trade deficit in 2018.