The coming months will see trade to continue rising, with international financial institution Maybank projecting a five percent growth for both exports and imports.

In January 2023, exports fell further by 13.5 percent year-on-year but imports rebounded 3.9 percent year-on-year respectively while trade deficit widened to $5.7 billion.

Currently, for 2023, we expect export and import growth of 5 percent vs 5.7 percent) and 3.5 percent vs 17.4 percent in 2022 with a $59 billion trade deficit from a $58.2 billion gap.

Manufacturing and agri-led exports

Maybank said a second consecutive month of drop in exports in January 2022 reflected a further decline in manufacturing exports on the back of continued lower electronic shipments.

In addition, agriculture-based exports declined for the fifth month in a row amid the continued drop in key products like coconut oils and fruits and vegetables, namely pineapple-based products like canned pineapple and concentrates.

Meanwhile, growth in exports of mineral products slowed, as higher shipments of gold were offset by lower overseas sales of copper metal. Imports rebounded after two consecutive months of decline on a jump in imports of mineral fuels, lubricant and related materials, largely due to the surge in imports of coal and coke and firmer growth in imports of consumer goods.

Imports of raw materials and Intermediate goods will continue to decline and capital goods.

Slower external trade growth is expected in 2023 This year, we expect exports and imports growth to moderate to 5 percent and 3.5 percent respectively, with a trade deficit of $59 billion.

This reflects the expected slowing in global economic growth with an estimated 1.9 percent growth this year against an estimated 2.9 percent for last year amid the impact on exports due to the stagnation/recession in major advanced economies, namely US and Europe.

Slower external trade growth is expected in 2023.

The pickup in China’s growth on its economic opening via the end of its zero Covid-19 policy.

At the same time, imports will be impacted by slower domestic demand and Philippines’ real GDP growth following BSP’s aggressive monetary policy tightening, where we still expect another 50 basis points hike to raise the benchmark policy rate to 6.5 percent from 6 percent amid elevated headline inflation and core inflation relative to BSP’s 2 percent to 4 percent target.