FX.co ★ Philippines Trade Gap Widens Sharply in May

The Philippines’ trade deficit widened to USD 5.5 billion in May 2026 from USD 3.6 billion in the same month a year earlier, marking the second-largest shortfall in more than a year, surpassed only by April’s gap. The deterioration in the trade balance was largely driven by a 21.9% year-on-year surge in imports to USD 13.4 billion, fueled by a sharp increase in purchases of electronic products (+93.3%), particularly semiconductors (+125.8%), amid the ongoing global boom in AI-related demand. Imports of mineral fuels (+35.6%) and cereals and cereal preparations (+2.5%) also rose. China remained the Philippines’ largest source of imports, accounting for 31.7% of the total, followed by South Korea (13.2%) and Indonesia (6.4%).

On the export side, shipments increased 7.6% to USD 7.3 billion, supported by higher sales of electronic products (+11.9%), machinery and transport equipment (+51.2%), other mineral products (+30.2%), and gold (+19.4%). The United States retained its position as the Philippines’ top export market, taking 17.2% of total exports, followed by Hong Kong (15.2%), Japan (13.1%), and China (11.5%).