THE March trade deficit was $3.18 billion, the smallest in nearly three years, as both exports and imports declined, according to preliminary data from the Philippine Statistics Authority.
The trade balance in March — or the difference between the value of exports and imports — was smaller than the $3.66 billion posted in February and the $5.02 billion from a year earlier.
The March reading was the smallest since the $3.18-billion deficit in May 2021.
The balance of trade has returned a deficit for nearly nine years, or since the $64.95-million surplus reported in May 2015.
Outbound goods shipments in March amounted to $6.13 billion, down by 7.3% from a year earlier.
This ended a two-month run of export growth and was the weakest performance since the 13% contraction in November.
Imports contracted by a fifth to $9.31 billion in March, the sharpest decline since the 20.8% drop posted in July 2020.
In the first quarter, the trade deficit narrowed 22.2% year on year to $11.24 billion.
During the period, exports rose 4.8% to $17.98 billion, while imports fell 7.6% to $29.22 billion.
The Development Budget Coordination Committee projects 3% and 4% growth in exports and imports, respectively, for this year.
Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. said by phone that the narrower trade deficit reflected the flow of raw materials.
“Raw materials imports tapered towards the first quarter of the year compared to imports in the last quarter last year where they had to increase because of production targets,” Mr. Ortiz-Luis said.
Accounting for the bulk of exports were manufactured goods, which fell 4.6% to $4.97 billion in March.
Electronic products, which account for 58.6% of manufactured goods and more than half of total exports, rose 0.8% to $3.59 billion in March. Almost half of the total consisted of electronic products, where exports fell 0.2% to $2.80 billion.
Exports of mineral products, accounting for 9.3% of total exports, contracted 26.4% to $567.35 million in March.
Meanwhile, imports of raw materials and intermediate goods declined 25.2% to $3.18 billion. These accounted for a 34.2% share of the total.
Imports of capital goods declined 14.8% to $2.81 billion while imports of consumer goods fell $1.83 billion, 19.1% lower than last year.
Import of mineral fuels, lubricants, and related materials contracted by 18.1% to $1.46 billion in March.
Danilo C. Lachica, president of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc., said in an e-mail that the contraction in imports and exports was mainly due to inventory correction and the impact of global geopolitics.
He expects growth in electronics exports to be flat in 2024 with “exports higher than imports (in the coming months).”
The US was the top destination of Philippine goods for March, accounting for 15.7% or $961.94 million. It was followed by Hong Kong, which took 14.4% or $880.88 million, and Japan with 12.9% or $790.02 million.
Meanwhile, China was the main source of imported products, accounting for 24.4% or $2.27 billion of the total import bill.
Despite the contraction in imports and exports for March, Mr. Ortiz-Luis expects the Philippines to hit its trade targets for the year.
“The trade balance will improve, or it will more or less be the same unless there are surprises from the outside,” Mr. Ortiz-Luis said. — Andrea C. Abestano