The country’s trade deficit shrank 28.6 percent in March to $2.38 billion from $3.33 billion a year ago, as imports and exports both declined amid the coronavirus disease 2019, the Philippine Statistics Authority said Wednesday.
The March figure brought the trade deficit in the first quarter to $7.540 billion, down from $10.340 billion in the same period last year.
Data showed exports in the three-month period amounted to $11.44 billion, down 25.7 percent from $15.40 billion on year and the lowest level in two years.
Exports accounted for $4.53 billion (39.6 percent) of the total trade in March while imports contributed $6.91 billion (60.4 percent) .
Export sales in March fell 24.9 percent to $4.53 billion from $6.03 billion a year ago. Largely contributing to the downtrend in March were nine of the top 10 major export commodities led by metal components (-40.9 percent); machinery and transport equipment (-33.1 percent); and electronic products (-24.0 percent).
Imported goods in March declined 26.2 percent to $6.91 billion from $9.37 billion a year ago. The drop was due to the decreases in the top 10 major import commodities led by industrial machinery and equipment (-39.4 percent); telecommunication equipment and electrical machinery (-37.1 percent); and miscellaneous manufactured articles (-32.9 percent).
Acting National Economic and Development Authority director-general and Economic Planning Secretary Karl Kendrick Chua said in a statement the COVID-19 pandemic around the world and the resulting restrictions in production supply chains and global trade flow led to the decline in Philippine trade in March 2020.
“Merchandise trade may recover in 2021, but this will depend on how fast we can contain the spread of COVID-19 and mitigate its economic impact through government policies to support affected industries and workers,” Chua said.
“To improve the country’s trade performance, export manufacturers are encouraged to use digital technology and innovative approaches to continue operation and secure new markets. Firms will have to put in place alternative business processes that will become the new standards for engaging with clients, buyers, and suppliers,” he said.
Chua said the export industry must be more responsive to the changes in consumer spending and redesign their product lines accordingly. Companies should consider the needs and preferences of those working from home, such as in terms of garments, personal care, health equipment and household tools.
“We may see increased interest in advanced electronics and software for artificial intelligence, plastic products that serve as barrier for store fronts, and other protective equipment,” Chua said.
Chua stressed that policies expediting the sector’s recovery with the health of the population in mind would be critical to the country’s trade upturn.
“We are working closely with Congress to craft an economic recovery program that is attuned to the needs of affected industries, particularly our small and medium enterprises, which were forced to scale back or totally close operations due to this unprecedented health crisis. The program will include highly targeted tax incentives that are time-bound, transparent, and performance-based to help us attract the right types of investments and help firms recover,” he said.