Trade Update: Wider trade deficit in February

The Philippine trade deficit widened by 23.1% year-on-year (YoY) to USD 3.68 billion in February. This brings the year-to-date trade deficit to USD 7.96 billion, only 0.1% wider than in the first two months of last year.

Key points

•  Imports growth outpaced exports growth for the first time in 10 months, as exports slowed and imports picked up.
• Exports growth decelerated to 8.0% YoY in February, led by electronic exports, particularly semiconductors.
• Meanwhile, imports grew by 12.6% YoY, led by capital goods. The double-digit YoY increase in total imports is a reversal from the contraction in the preceding month.

Metrobank’s take

• Metrobank anticipates that exports growth may be capped by slower global demand amid the ongoing US-Iran conflict. Meanwhile, imports strength may be weakened as business sentiment wanes amid heightened global uncertainty.
• Considering expectations of relatively weaker imports and higher import costs, the trade deficit could further widen year-on-year and could put pressure on the peso.
• For those with impending requirements, it may be strategic to pick up on US dollars ahead of the imports season in the second to third quarter.

(Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.)   

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ECONOMIC UPDATES

Philippines Trade Update: Wider deficit on strong imports

The trade deficit may continue to widen more than previously expected

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