August 5, 2020
MANILA – The country’s merchandise trade performance continued its gradual recovery in both exports and imports in June 2020, the National Economic and Development Authority said.
The Philippine Statistics Authority reported today that the country’s total merchandise trade further eased its negative trajectory in June 2020 with a slower decline of 19.9 percent, after a steep 35.3 percent contraction in May 2020.
Merchandise exports declined by 13.3 percent (from a 26.9% drop in May) as outward shipments of mineral products, manufactured products, and forest products registered notable improvements.
Imports, meanwhile, recovered gradually by registering a 24.5-percent decrease (from a 40.6% contraction in May) as inward shipments of unprocessed raw materials showed a positive rebound with the re-opening of the economy.
“This slower decline in the country’s trade performance signals the resumption of economic activities,” said Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua.
However, the recent issuance to revert Metro Manila, Bulacan, Cavite, Laguna, and Rizal back to a Modified Enhanced Community Quarantine status may, for a limited period, affect businesses and the workforce as certain sectors need to scale back or temporarily suspend operations.
“The two-week MECQ will allow the government to reassess approaches, procedures, and response protocols and capacities that may need to be improved to better contain the spread of the virus while ensuring that the gains from reopening the economy are not fully reversed,” he said.
Chua also said that government efforts will continue to focus on realizing structural reforms and supporting needed legislations to ensure that businesses will be supported as the economy recovers.
“NEDA has been working closely with relevant departments and both houses of Congress to prioritize reforms that will help the economy recover, promote competitive playing field, and allow firms to maximize productive capacity,” he added.
Meanwhile, on a global perspective, trade flows to most of the country’s major trading partners remained in the negative territory but contractions were at a slower pace compared to the previous months.
Exports of goods to the European Union improved largely by 25 percentage points while the progress in East Asia and ASEAN continued as contraction narrowed by almost 18 percentage points from the previous period.
“As ASEAN countries account for more than 15 percent of the country’s total exports, the contraction in these countries’ GDP would need to be closely watched as further drop in their economies could affect trade flows and may reverse the improvements in trade observed during the period,” Chua said.
The decline in merchandise exports can also be partly due to demand factors, particularly how the Philippines’ trading partners are faring economically.
“With restricted mobility and economic activity due to the global pandemic, GDP growth is negatively affected. Our major trading partners’ GDP has declined in the second quarter of the year, resulting in a reduced appetite for imported goods. This has led to lower demand for Philippine exports,” the Cabinet official said.