January exports, imports shrank on lingering impact of pandemic

Exports and imports contracted in January on the lingering impact of the coronavirus pandemic on the global trade.

Data from the Philippine Statistics Authority showed Friday merchandise export sales amounted to $5.49 billion in January, down 5.2 percent from $5.8 billion a year ago. The figure was a reversal of an annual increase of 1.7 percent in December and 9.4-percent growth in January 2020.

The PSA said of the top 10 major commodity groups in terms of value, four recorded annual decreases led by fresh bananas (-46.9 percent). This was followed by other manufactured goods (-12.8 percent); machinery and transport equipment (-11.9 percent), and coconut oil (-11.7 percent).

By commodity group, electronic products continued to be the top export with total earnings of $3.24 billion. This amount accounted for 59.1 percent of the total exports in January 2021.

Meanwhile, imports tumbled 14.9 percent in January to $7.91 billion from $9.3 billion a year earlier. This represented 21 consecutive months of negative growth since May 2019.

Data also showed that the annual decline was lower at -8.2 percent in December.

The PSA said the annual decrement of imported goods in January was due to the decrease in nine of the top 10 major import commodities. The annual rate of decline was fastest in industrial machinery and equipment (-36.9 percent), followed by transport equipment (-36.8 percent), and mineral fuels, lubricants and related materials (-33.6 percent).

ING Bank Manila senior economist Nicholas Mapa said the sustained drop in imports highlighted the negative impact of the recession, with the 14.8-percent drop in capital goods mirroring falling capital formation and the 12.9-percent contraction in consumer goods reflecting fast-fading household consumption.

“The ongoing slump in imports suggests that growth pains for the Philippines will be around for some time with the sustained drop in capital goods and raw materials suggesting that potential output is falling as well,” Mapa said.

He said demand for heavy machineries for construction, commercial aircraft and road vehicles fell sharply, which would dent capital formation and cap any recovery effort for an economy still struggling with recession.

The country’s total external trade in goods in January amounted to $13.40 billion, down 11.1 percent from the same month last year. This was faster than the annual decrease in the previous month of -4.2 percent.

The country incurred a trade-in-goods deficit of $2.42 billion in January, down 30.9 percent a year ago.

Exports tumbled 10.1 percent in 2020 to $63.77 billion, while imports fell 23.3 percent to $85.61 billion.