The Philippines' trade-in-goods deficit expanded to $5.48 billion in May, a 50.5% increase from the same month a year earlier. This rise reflects faster growth in imports compared to exports.
Month‑on‑month, the deficit narrowed from the revised $6.43 billion reported in April, marking the smallest gap since March's $5.04 billion. The country has remained in deficit for more than a decade, with the last surplus recorded in May 2015.
Imports surged 21.9% annually to $13.36 billion in May, reversing a 0.9% decline seen a year ago and slowing from a 27.3% increase in April. The import value was the lowest since March, and growth was the slowest since March's 17.1% rise.
Exports grew 7.6% to $7.87 billion, a modest increase compared to the 15.5% rise a year earlier but slightly higher than the 7.2% growth in April. Export sales reached the highest level since March, totaling $8.19 billion.
Analysts attribute the widening deficit to a front‑loading of imported production inputs amid geopolitical uncertainties and supply‑chain disruptions.
During the January‑to‑May period, the trade-in-goods deficit grew 25% to $25.24 billion, while imports increased 16.2% to $63.11 billion and exports rose 10.6% to $37.87 billion. These figures represent the highest import and export values recorded since 1991.
Projections for the year anticipate a 3% growth in exports and a 5% rise in imports.
Imports of raw materials and intermediate goods grew 33.1% to $5.46 billion, representing 40.9% of the total import bill. Capital goods imports increased 22.6% to $3.73 billion, accounting for 28%, while consumer goods imports fell 4.9% to $2.37 billion, 17.7% of May imports.
Electronic products dominated the import landscape with a value of $4.63 billion, a 93.3% jump from the previous year. Semiconductors, a key component of electronic goods, rose 125.8% to $3.75 billion, and mineral fuels and lubricants grew 35.6% to $1.75 billion.
China supplied the largest share of imports at $4.23 billion, followed by South Korea, Indonesia, Malaysia, and Japan.
Exports of electronic products increased 11.9% to $4.3 billion, making up 54.6% of total exports. Semiconductors, a major portion of electronic goods, grew 11.5% to $3.21 billion, while mineral products rose 30.2% to $406.78 million.
The United States was the leading destination for Philippine exports, receiving $1.35 billion, followed by Hong Kong, Japan, China, and Singapore.
Negotiations to revise the Japan‑Philippines Economic Partnership Agreement and the forthcoming free trade agreement with Canada could spur future export growth, though uncertainties in U.S. trade policy pose potential risks.
Recent U.S. actions flagged the Philippines for alleged forced labor concerns, creating a possibility of tariffs up to 12.5%. Additionally, a 100% tariff could apply to goods from countries imposing digital service taxes, though implementation remains uncertain.
Export momentum may slow as demand from Hong Kong and the United States weakens, and support from other key markets diminishes.
