By Beatriz Marie D. Cruz, Senior Journalist
PHILIPPINES trade deficit in goods narrowed to $4.94 billion in June as production of synthetic goods increased.artificial intelligence (AI) dialed two numbers growth in imports and exports, data from the Philippine Statistics Authority (PSA) shown.
Preliminary data from the PSA showed the trade-in-goods balance – the difference between exports and imports – stood at 4.94 billion dollars in June, an increase of 12.3% from the 4.4 billion dollars recorded in the same month last year.
Month-on-month, the trade gap narrowed from the $6.1-billion deficit posted in May.
June saw the smallest trade gap in four months or since the $4.01 billion gap in February.
The country’s trade balance has been in deficit for more than a decade or so since a surplus of $64.95 million was recorded in May 2015.
“Growth in global demand for semisconductors and other electronics are increasingly shaping the Philippines’ trade profile,” Chinabank Research said in its commentary.
Exports fell 24.1% to $8.77 billion, a slower figure than the 26.9% increase last year but faster than the 8.6% growth in May.
Total sales of Philippine-made goods in June were the highest since the series began in 1991.
Meanwhile, imports jumped 19.6% to $13.711 billion in June, faster than the 15.8% increase in the same month last year but less than the 28.2% increase in May.
The import bill for June was the lowest sincin April when it reached $ 13.71 billion.
In the first half of the year, the trade deficit decreased by 25.85% to $30.81 billion. $24.48 billion last year.
In the January to June period, merchandise sales jumped 17.84% to $77.53 billion from $65.79 billion.
Exports increased by 13.09% to $46.72 billion from $41.31 billion last year.
The Development Budget Coordinating Committee projects exports and imports to grow by 3% and 5% respectively, this year.
AI DEMAND
Electronic products, which accounted for 59.9% of total sales in June, jumped 35.2% to $5.25 billion.
“Rapidly growing demand for AI, the Internet of Things, and investments in hyperscale data centers have fueled strong growth in components and semiconductors,” Dept.the Department of Trade and Industry said a statement.
Semiconductor exports, accounted for by the bulk of electronic products, rose 33.4% in June to $3.85 billion.
“Semiconductors continued to underpin strong export performance. The strong growth came in spite of emergencies such as ongoing warehouse congestion, which disrupted production schedules, increased inventory and storage costs, and put pressure on vendors’ delivery commitments,” Chinabank Research said.
Exports of mineral products, which made up 4.7% of total exports in June, decreased by 17.7% to $414.85 million.
In June, the United States was the leading destination for Philippine-made goods worth 1.76 billion dollars or 20.1% of the total.
This was followed by Hong Kong with $1.34 billion (15.3%), China with $1 billion (11.4%), Japan with $990.16 million (11.3%), Singapore with 508.18 million (5.8% share).
Meanwhile, imports of raw materials and intermediate goods jumped by 53.4 percent to $5.89 billion in June, accounting for 42.9% of the total import bill.
Imports of major goods fell 5.5% to $3.62 billion, making up 26.4% of June’s exports.
By commodity group, electronic goods posted the largest import value in June at $4.77 billion, up 82.9% from $2.61 billion in the same month last year. Electronic products account for 34.8% of imports.
Semiconductor imports, which make up 27.4% of imported electronic goods, more than doubled (105.4%) to $3.76 billion.
“Imports of electronic equipment production increased significantly (+227.9%), increasing their share of total imports to 18.3% from 6.7% last year.
Imports of petroleum, lubricants and related products, which accounted for 11.8% of June imports, rose 6.3% to $1.62 billion.
“The real engines of the increase in imports were higher global oil prices, transportation costs, and other transportation costs due to supply disruptions caused by the Middle East crisis,” Francisco Cid L. Terosa, a former professor at the University of Asia and the Pacific School of Economics, said in an email.
China remained the country’s leading source of imports in June at $4.35 billion or 31.7% of the total import bill.
The Republic of Korea followed with $1.78 billion (13 shares), Japan with $919.13 million (6.7%), Indonesia with $912.63 million (6.7%), and the United States with $706.7 million (5.2%).
Looking ahead, export growth will be driven by the upcoming AI base in Tarlac under the US-led Pax Silica initiative, which is expected to boost exports of high-value semiconductors to the Philippines, Chinabank Research said.
“In the medium term, we think the Pax Silica industrial hub can significantly strengthen the role of the Philippines in the global technology industry by supporting the export of high-value semiconductors, advanced manufacturing, and AI-related infrastructure,” it noted.
However, concerns about the potential impact of the AI hub on water and energy resources must be addressed to ensure sustainable economic development.said Chinabank Research.
