The country’s trade deficit narrowed significantly in February 2025 to USD 3.2 billion, down from USD5.1 billion in January and USD3.6 billion in the same month last year, according to data released by the Philippine Statistics Authority. The improvement reflects a modest rebound in exports and a decline in import spending, offering a temporary boost to the country’s external balance.
Exports rose 3.9 percent year-on-year to USD6.3 billion, supported by strong overseas demand for coconut oil (up 111.8 percent), gold (37.5 percent), other manufactured goods (34.6 percent), and electronic products (2.5 percent), particularly medical instrumentation, which surged 95.2 percent. The United States emerged as the top destination for Philippine exports, accounting for 15.8 percent of total outbound shipments, narrowly ahead of Japan (15.7 percent), Hong Kong (14 percent), and China (10.3 percent).
On the import side, total inbound shipments slipped 1.8 percent to USD9.4 billion, driven by decreased purchases of mineral fuels and lubricants (-23.2 percent), iron and steel (-13.2 percent), and miscellaneous manufactured articles (-3.7 percent). China remained the Philippines’ top import partner, supplying 26.1 percent of total imports, followed by Japan (8.9 percent), Indonesia (8.5 percent), and South Korea (7.1 percent).
The narrowing of the trade gap in February is a welcome development amid concerns over persistent current account pressures. However, a headwind looms in the form of a US reciprocal tariff measure that took effect on 2 April hitting Philippine exports just as they gain momentum. Analysts warn this could disrupt trade flows and dampen the recent export-led gains, especially given America’s role as the country’s largest export market.
Despite February’s positive data, the cumulative trade deficit for the first two months of 2025 widened to USD8.3 billion from USD7.9 billion a year earlier, underscoring ongoing vulnerabilities in the country’s trade position.
