The Philippines’ trade gap in August narrowed to its lowest level in six months as exports increased while imports declined, according to the Philippine Statistics Authority.
PSA data showed that the balance of trade in goods, or the difference between the value of exports and imports, amounted to a $3.54-billion deficit in August, 19 percent lower than the $4.4 billion shortfall in the same month last year.
The August trade gap was narrower than the $4.42-billion trade deficit in the previous month.
It was also the smallest trade gap posted since the $2.97 billion shortfall in February.
From January to August, the country’s trade deficit narrowed to $32.38 billion from $34.33 billion in the same period last year.
PSA data also showed that the country’s export sales rose by five percent to $7.06 billion in August from $6.75 billion in the same month a year ago.
Dollar earnings from electronic products, the country’s top export commodity, went up by 8.5 percent to $3.87 billion in August from $3.57 billion in the same month in 2024.
Hong Kong dethroned the United States as the country’s top export market, accounting for 17 percent or $1.19 billion of the total in August.
From January to August, Philippine exports grew by 13 percent to $55.7 billion from $49.45 billion in the same period last year.
Meanwhile, PSA data showed that the country’s imports declined by five percent to $10.6 billion in August from $11.15 billion in the same month last year.
The PSA reported that imports of mineral fuels, lubricants and related materials experienced the largest decline, reaching only $611.83 million in August.
China remained the largest supplier of the country’s imported goods, amounting to $3.19 billion, or 30 percent of the total, in August.
From January to August, the country’s total imports climbed by five percent to $88.08 billion from $83.78 billion in the same period a year ago.
Philippine Institute for Development Studies senior research fellow John Paolo Rivera said in an email that the latest trade performance may be due to weak import demand amid slower domestic activity and the tapering off of pre-tariff frontloading.
Exporters were frontloading shipments to the US to avoid the reciprocal tariffs that took effect on Aug. 7.
Chinabank Research stated in a commentary that the latest export performance indicates that tariffs are beginning to weigh on external demand.
‘This underscores the need to further diversify export markets, especially with the possibility of additional US tariffs on the horizon,’ Chinabank Research said.
Rivera said that downside risks remain due to global uncertainties and tighter financial conditions.
‘A sustained trade recovery will depend on export diversification and improving logistics competitiveness,’ he said.