Disruptions in the global and national supply chain caused by the COVID-19 pandemic, which limited the movement of not only people but also goods, caused a sharp drop in Philippine exports and imports in March, the government reported on Wednesday.
Preliminary data from the Philippine Statistics Authority showed that sales of Philippine products abroad fell 24.9 percent on-year to $ 4.53 billion, while imported goods fell 26.2 percent faster to $ 6.91 billion in March.
As the drop in imports outweighed the decline in exports, the goods trade deficit narrowed 28.6 percent to $ 2.38 billion that month.
“The sharp contraction in March trade data reflects the early start of COVID-19, mainly in its effect on the country’s main trading partner: China. The Philippines, as part of the global supply chain, experienced a sharp pullback in export demand orders as China, Japan, and South Korea battled the virus. Imports for March fell, reflecting the negative performance of government construction efforts as raw materials were unable to arrive in time as supply chains were disrupted, “said ING Bank Philippines senior economist Nicholas Antonio Mapa , in a note to customers.
“Meanwhile, the March 15 shutdown cut off the Philippines from the rest of the world, and congestion was noted in ports immediately after the quarantine was implemented, as the logistics details had not yet been established. We expect months of sustained contraction in the immediate term, as the closure hinders manufacturing and commercial activity. Moderate global demand should ensure that trade in 2020 is disappointing, “added Map.
Total foreign trade in March contracted 25.7 percent on-year to $ 11.44 billion, which the state planning agency, the National Authority for Development and Economy (Neda), said was the lowest monthly value of exports and imports combined in two years.
In a statement, Neda blamed “the COVID-19 pandemic worldwide and the resulting restrictions on production supply chains and global trade flow” for the Philippines’ weak trade in foreign goods in March. At the end of the first quarter, Philippine exports decreased 5.2 percent year-over-year to $ 15.72 billion, while imports fell 13.6 percent to $ 23.26 billion, reducing total foreign trade in three months by 10.4 percent to $ 38.98 billion.
However, the first quarter trade deficit narrowed by 27.1 percent to $ 7.541 billion.
Kajal Khatri is one of our senior news editors. Kajal graduated from IGNOU in 2010 with a degree in Business Management. She likes social media trends, being semi-healthy, and trying new foods. When she isn’t writing, Kajal loves to travel. She recently visited NYC in America.