Exports rose 12.7 percent in July from a year ago and exceeded the pre-pandemic levels in 2019 on the back of the gradual recovery in global trade and the unimpeded export manufacturing activities despite the different levels of quarantine restrictions in the country.
The Philippine Statistics Authority said Thursday exports reached $6.42 billion in July, higher than $5.7 billion a year ago and the pre-pandemic value of $6.25 billion in 2019. Total exports in the first seven months also climbed 19.5 percent to $42.39 billion, exceeding the recorded $40.82 billion in 2019.
“Our sustained export growth rate can be attributed to the recovery in the global markets, coupled with our efforts in ensuring that the exports manufacturing sector operate at 100-percent capacity even during the ECQ [enhanced community quarantine],” said Trade Secretary Ramon Lopez.
Exports were driven by increased global uptake of semiconductors, electronic data processing products, consumer electronics and telecommunication products. The Semiconductor Industry Association reported that global semiconductor sales grew by 29 percent in July to $45.4 billion.
China, the world’s largest copper importer, bought over 555,000 metric tons of copper in July, up 14.24 percent from the previous month and 89.93 percent from a year ago. The Philippines also benefited from the increase in the US production of motor vehicles and parts with US companies cancelling their usual factory shutdowns in July.
The export performance was largely influenced by the robust growth in Asia. Asian economies exhibited impressive export performance, reflecting a strengthened optimism in economic recovery. Philippine exports to China grew by 30.7 percent from January to July compared to the same period last year. Shipments to Hong Kong, Singapore and Japan in July grew by 13.4 percent, 9.8 percent and 3.4 percent, respectively.
“The Philippines is clearly benefitting from its integration in Asia’s supply chains and the strong economic rebound in the region. With our market access reach, resilient supply chains, geographic location, and enhanced investment incentives, the Philippines is an ideal investment destination for manufacturing firms who wish to take advantage of Asia’s growth,” said Lopez.
Imports also grew by 24 percent in July to $9.71 billion and by 30.2 percent in the first seven months to $63.70 billion. Data showed that import value for personal protective equipment and medical supplies, including COVID-19 vaccines, reached $123.52 million in July, up by 256.2 percent from the same month last year. The country imported $104.20 million worth of COVID-19 vaccine doses during the month.
The trade deficit amounted to $3.29 billion in July and $21.3 billion in the first seven months.
ING Bank Manila senior economist Nicholas Mapa said the latest trade numbers reflected the gradual reopening of the economy although the figures might have been bloated because of the base effects.
“Both exports and imports posted strong gains, up 12.7 percent and 24 percent, respectively, with overall economic activity improving compared to 2020 levels. Inbound shipments outpaced export growth due in part to increased volume of fuel and as crude oil prices rose over the last year,” Mapa said.
“We can expect a pullback in trade activity for the August report after Philippine authorities re-imposed tighter lockdown measures during the month. Nonetheless, we forecast import growth to continue to outperform the export sector with the trade deficit likely staying elevated for the balance of the year,” Mapa said.