By Beatriz Marie D. Cruz, Senior Reporter
THE Philippines’ trade-in-goods deficit widened to $5.48 billion in May from a 12 months ago, as imports grew faster than exports, according to the statistics agency.
Preliminary data from the Philippine Statistics Authority (PSA) showed the trade-in-goods balance — the difference between exports and imports — widened by 50.5% to $5.48 billion in May from $3.64 billion recorded in the identical month a 12 months ago.
Month on month, the trade gap narrowed from the revised $6.43 billion in April.
May saw the smallest trade gap in two months or for the reason that $5.04-billion deficit in March.
The country’s trade balance has been in deficit for greater than a decade or for the reason that $64.95-million surplus recorded in May 2015.
Merchandise imports jumped by an annual 21.9% to $13.36 billion in May, a turnaround from the 0.9% dip in the identical month a 12 months ago but slowed from the 27.3% rise in April.
Nevertheless, the import value was the bottom since $13.23 billion in March, while growth was also the slowest since 17.1% in March.
Alternatively, total outbound sales of Philippine-made goods rose by 7.6% to $7.87 billion in May, slower than the 15.5% increase a 12 months ago but barely faster than 7.2% growth in April.
PSA said export sales in May were the very best since $8.19 billion in March. Export growth was also the fastest in two months or since 20.8% growth in March.
Former University of Asia & the Pacific School of Economics Dean Francisco Cid L. Terosa said in an e-mail that the May trade deficit widened as buyers front-loaded imported production inputs as a consequence of geopolitical uncertainties and supply-chain disruptions.
Within the January-to-May period, the trade-in-goods deficit widened by 25% to $25.24 billion from $20.08 billion a 12 months ago.
For the five-month period, imports rose by 16.2% to $63.11 billion from $54.32 billion a 12 months ago.
The whole value of exports jumped by 10.6% to $37.87 billion within the five-month period from $34.25 billion a 12 months ago.
PSA said these were the very best import and export values recorded for the reason that series began in 1991.
The Development Budget Coordination Committee expects 3% growth in exports and a 5% increase in imports this 12 months.
CAPITAL GOODS DEMAND
PSA data showed imports of raw materials and intermediate goods grew by 33.1% to $5.46 billion in May, making up 40.9% of the import bill.
Imports of capital goods increased by 22.6% to $3.73 billion, making up 28% of the entire. Alternatively, imports of consumer goods declined by 4.9% to $2.37 billion, making up 17.7% of May imports.
Chinabank Research said the import growth in May was driven by the strong demand for capital goods, reasonably than global oil prices.
“If this trend persists, a rise in imports could possibly be viewed as a positive development, because it portends improving business sentiment, stronger productive capability, and support for future economic growth,” Chinabank Research said in a note.
By commodity group, electronic products posted the biggest import value at $4.63 billion, surging 93.3% from the $2.39-billion value recorded in May 2025. Electronic goods accounted for 34.7% of May imports.
Imports of semiconductors, which accounted for 28.1% of imported electronic goods, rose by 125.8% to $3.75 billion in May.
Imports of mineral fuels, lubricants and related materials, which accounted for 13.1% of May imports, jumped by 35.6% to $1.75 billion.
China was the country’s top source of imported goods with $4.23 billion or 31.7% of the entire import bill in May.
South Korea followed with $1.76 billion (13.2%), Indonesia with $858.79 million (6.4%), Malaysia with $813.09 million (6.1%), and Japan with $806.32 million (6%).
AI BOOM
In May, exports of electronic products jumped by 11.9% to $4.3 billion, making up 54.6% of the entire exports.
Semiconductors, which accounted for the majority of electronic products and greater than 40% of total exports, rose by 11.5% to $3.21 billion.
“The AI (artificial intelligence)boom continues to support demand for Philippine semiconductors,” Chinabank Research said.
“Nevertheless, logistical constraints emerged, with reported shipment delays on the Ninoy Aquino International Airport as a consequence of congestion and limited warehousing capability — highlighting infrastructure bottlenecks that might pose near-term risks,” it added, noting that local chipmakers depend on air freight to import components for assembly, testing, and packaging before re-exporting them.
Exports of mineral products, which accounted for five.2% of the entire, climbed by 30.2% to $406.78 million in May.
The US was the predominant destination of locally made goods in May with $1.35 billion in exports or 17.2% of the entire.
It was followed by Hong Kong with $1.2 billion (15.2% share), Japan with $1.03 billion (13.1%), China with $905.2 million (11.5%), and Singapore with $442.55 million (5.6%).
OUTLOOK
The Philippines’ ongoing talks to revise the Japan-Philippines Economic Partnership Agreement, in addition to its upcoming free trade agreement with Canada, could provide opportunities for export growth in the approaching months, Chinabank said.
Nevertheless, the US’ uncertain trade policies pose risks to the country’s trade deficit, it noted.
“Proposed US trade measures — including latest tariffs of as much as 12.5% as a consequence of forced labor concerns and 100% tariff on imports from countries imposing digital service taxes — pose potential downside risks, although implementation stays uncertain,” Chinabank said.
Philippine exports could face tariffs of as much as 12.5% after it was flagged by the US Trade Representative in June for allegedly failing to ban the importation of products made with forced labor.
US President Donald J. Trump last week threatened to slap a 100% tariff on goods from any country that imposes a digital service tax on American firms.
Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, said export growth might lose momentum in the approaching months amid softening demand.
“Momentum continues to fade… due largely to the intensifying drag imposed by softening demand from Hong Kong and the US, while support from other key markets has also vanished,” he said in an e-mail.