Trade deficit narrows to 4-year low in 2025

by Abigail Marie P. Yraola, Deputy Research Head

The Philippines’ trade-in-goods deficit narrowed to a four-year low in 2025, as exports grew by double-digits and imports picked up, the Philippine Statistics Authority (PSA) reported on Tuesday.

Preliminary data from the PSA showed the country’s trade deficit fell by 9.5% year on year to $49.17-billion deficit in 2025, smaller than the $54.33-billion gap a year earlier.

The latest reading marked the smallest trade gap in four years or since the $42.19-billion deficit in 2021.

In 2025, merchandise exports jumped by 15.2% to $84.41 billion, better than the 2% decline expected by the government.

This was also a turnaround from the 0.5% contraction in 2024 when export value reached $73.27 billion.

Electronic products, which accounted for 54.4% of the total exports, grew by 17.6% to $45.96 billion.

Semiconductors, which accounted for the bulk of electronic product sales, climbed 18.7% to $34.62 billion.

In 2025, the United States was the was the top export destination for locally made products last year with a 15.9% share worth $13.44 billion.

China, which accounted for a 14.6% share ($12.32 billion) of exports, followed by Japan with 13.7% share ($11.57 billion).

Meanwhile, imports grew by 4.7% year on year to $133.57 billion last year. Import growth also surpassed the 3.5% growth target set by the government.

Imports growth in 2025 was faster than the 1.1% gain in 2024 when it reached $127.60 billion.

During the period, electronic products made up most manufactured goods with 23.9% share. The said commodity jumped by 16.7% to $31.94 billion while semiconductors grew by 20.1% to $22.22 billion.

China was the country’s biggest source of imports in 2025 with a 28.6% share worth $38.22 billion. South Korea followed with a 7.9% share ($10.58 billion), and Japan with a 7.% share as well ($10.52 billion).