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DOF Economic Bulletin on Merchandise Trade
· Total merchandise trade dipped to less than $6.2 billion in April, a decline by nearly 60% from the $15.1 billion figure of the same month last year. Merchandise trade partially recovered in the subsequent months, reflecting the gradual and calibrated reopening of the economy. Total trade declined by 35.3% in May, 18.7% in June and 18.6% in July. (Table 1)
· This recovery in trade is also seen in the improvement in the Manufacturing PMI of recent months from the low of 31.6 in April to 47.3 in August.
DOF View
· Good macroeconomic fundamentals have cushioned the impact of the coronavirus pandemic. A prudent, calibrated reopening of key sectors of the economy will be key to the recovery of the economy in general and trade in particular.
· Looking ahead, the Philippines should adopt economic reforms, in addition to its infrastructure program, to attract more investments. Among others, CREATE, FIST, PIFITA, as well as amendments to the Commonwealth-era Public Service Act and the Retail Trade Liberalization Act, can help the country weather and recover from the impacts of the coronavirus pandemic.
Furthermore, improvements in ease of doing business improvements will also be important in adapting to the new normal.
Table 1 Total Trade* (US$M)
January February March April May Junep Julyp
2019 14,858 13,237 15,397 15,103 16,049 14,936 16,145 2020 15,082 12,458 11,454 6,117 10,389 12,138 13,134 YOY Change (%) 1.5 (5.9) (25.6) (59.5) (35.3) (18.7) (18.6) Source of Basic Data: PSA
Notes: * - Imports plus exports; p – preliminary
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-oOo- Table 2 Manufacturing Purchasing Managers Index (PMI)
January February March April May June July August
2019 52.3 51.9 51.5 50.9 51.2 51.3 52.1 51.9
2020 52.1 52.3 39.7 31.6 40.1 49.7 48.4 47.3
Sources: IHS Markit, TradingEconomics Note: PMI above 50 indicates expansion
