FocusEconomics sees strong rebound in Philippine trade figures

MANILA, Philippines — Barcelona-based think tank FocusEconomics is expecting a strong rebound in Philippine exports and imports over the next two years after a major slump this year as the pandemic took its toll on global trade.

FocusEconomics sees exports rising by 9.1 percent over the next two years and imports surging by 18.6 percent in 2021 and 20.7 percent in 2022.

Based on the latest assessment of the Bangko Sentral ng Pilipinas (BSP), exports are seen growing by five percent in 2021 after contracting by four percent this year and imports rising by eight percent after shrinking by 5.5 percent.

Latest data from the Philippine Statistics Authority (PSA) showed the country’s trade deficit narrowed by 47.3 percent to $16.07 billion from January to September compared to $30.48 billion in the same period last year due to the impact of the   COVID-19 pandemic on global trade.

Imports contracted by 26 percent to $61.95 billion during the nine-month period compared to last year’s $83.69 billion, while exports declined by 13.8 percent to $45.87 billion from $53.21 billion.

For the month of September alone, the country’s trade gap plunged by nearly 50 percent to $1.71 billion from $3.41 billion in the same month last year.

During the month, exports inched up by 2.2 percent to $6.22 billion from $6.08 billion, while imports fell 16.5 percent to $7.92 billion from $9.49 billion.

FocusEconomics said September’s reading was supported by higher shipments of chemicals, electronics, minerals and metals, and is a sign of the recovery in external demand.

However, the think tank noted the continued decline in imports in September was still indicative of weak domestic demand.

FocusEconomics said conditions are likely still downbeat in the fourth quarter after a softer GDP contraction of 11.5 percent in the third quarter.

It sees the country’s GDP rebounding with a growth of 7.1 percent in 2021 and 6.4 percent in 2022.

“Following 2020’s collapse, growth should return next year as both the domestic and external sectors recover. However, possible further lockdown measures to contain the virus, tepid fiscal support and structural damage to the labor market pose downside risks,” FocusEconomics said in a separate report.