Trade still contracting — NEDA

Preliminary figures released by the Philippine Statistics Authority (PSA) showed that the country’s total trade contracted 38.7% and the trade deficit shrank 48.9% in May 2020

Recent data from the PSA also showed that exports contracted 35.6% while imports declined by 40.6% in May 2020.

“The slower decline in trade performance is a welcome indication that economic activity has started to pick up with the relaxation of quarantine measures in certain areas, the gradual reopening of business, and the restarting of production in both the country and its trading partners,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said in an #AskNeda briefing.

The exports contraction though exports was not as serious as the 49.9% posted in April 2020 which was lower than the 1.8% growth in May 2019.

Export earnings decreased to $3.99 billion from $6.20 billion total exports in May 2019. The contraction in May 2020 was the third consecutive month that total exports declined this year.

In the previous month, export value fell at an annual rate of 49.9% while in May 2019, it gained at a rate of 1.8%.

Chua said the country’s export performance will continue to improve as manufactured goods, accounting for 80% of total exports, is expected to recover.

He said the latest results of the Purchasing Managers’ Index (PMI) for the Philippines rose from 40.1 in May to 49.7 in June.

“The Semiconductors and Electronics Industries in the Philippines Inc. [SEIPI] also indicated a gradual pick-up in semiconductor exports in the coming months and projected a flat growth in 2020, notwithstanding the on-going lockdown in Cebu where some of the electronics firms are located,” Chua said.

PSA data likewise showed import bill declined to $5.85 billion in May 2020 from $9.85 billion in May 2019.

The PSA said the contraction in May was the second-highest annual drop since decreases were observed beginning May 2019.

In the previous month, the decline was higher at 65.3% while in May 2019, imports decreased by 1.2% annually.

The PSA noted that the import value for personal protective equipment (PPE), and medical supplies in May 2020 amounted to $32 million, indicating an increase of 64.9%.

Slower annual growths of imported values for these medical items were lower in the previous month at 54.1% and in May 2019 at 39.1%.