The Philippines' trade-in-goods deficit widened to $5.15 billion in September, as exports surged at their fastest pace in five years, buoyed by a weak peso and strong global demand for semiconductors.

Preliminary data from the Philippine Statistics Authority (PSA) showed that the country's trade-in-goods balance — the difference between exports and imports — posted a $5.15-billion deficit in September, up from $4.67 billion in the same month last year. Month on month, the gap expanded 20.06% from the $4.3 billion recorded in August. According to PSA data, the September shortfall was the widest since the $6.35-billion deficit posted in July.

The Philippines has run a trade-in-goods deficit for more than a decade, dating back to the $64.95-million surplus recorded in May 2015.

Exports Hit Record High

Merchandise exports soared 35.6% to $9.87 billion in September, outpacing the 16.3% growth recorded in the same month a year earlier and the 28.3% rise in August. The September increase was the strongest since the 74.23% jump posted in April 2021.

Imports jumped 25.7% to $15.03 billion, accelerating from 5.2% growth in the same month last year and the 20.9% rise in August. The values of both imports and exports in September were the highest recorded since the data series began in 1991.

Chinabank Research said the record-high exports were driven mainly by semiconductors. "While robust AI-related investment supports chip demand, the current upcycle may eventually moderate," it said in a commentary.

Chinabank Research also noted that faster import growth widened the trade deficit, adding to external pressures and potential depreciation pressures on the Philippine peso.

Francisco Cid L. Terosa, an associate professor and former dean of the School of Economics of the University of Asia and the Pacific (UA&P), said the wider trade gap could be linked to the weaker peso, which raised the domestic cost of imported fuel and raw materials. "The weakness of the Philippine peso against the US dollar increased the domestic cost of imported fuel and raw materials," he said in an e-mailed reply to questions. The same currency weakness that buoyed export competitiveness also lifted the domestic cost of imported inputs, leaving its mark on both sides of September's trade ledger.

Nine-Month Picture

In the first nine months of the year, the trade gap widened by 25.53% to $47.16 billion from $37.57 billion. Over the January-to-September period, imports jumped 20.33% to $121.11 billion from $100.65 billion last year, while exports climbed 17.23% to $73.95 billion from $63.08 billion recorded in the same period a year earlier.

The Development Budget Coordination Committee projects exports and imports to grow by 3% and 5%, respectively, this year — targets that September's double-digit growth in both categories ran well ahead of, making the remaining monthly PSA releases a gauge of how the year's trade accounts settle.

Electronics Demand

Electronic goods, which accounted for 70.1% of September's exports, jumped 72% to $6.92 billion. Semiconductor exports, which made up the bulk of electronic products, soared 86.1% to $5.68 billion. By contrast, mineral products, which accounted for 3.4% of September exports, fell 20.7% to $333.93 million.

Chinabank Research said the semiconductor surge masked weakness in other export categories. "Outside semiconductors, however, export performance remained weak, with declines in agricultural products, particularly coconut and pineapples, mineral products, and other manufactured goods," it said.

The research house noted that chip demand is being driven by artificial intelligence (AI) investments but warned the trend could eventually cool. "Although the timing of a potential downturn is difficult to predict, the Philippines' reliance on semiconductor exports leaves it vulnerable to shifts in global technology investment," it said.

To sustain export growth, Chinabank Research said the country should diversify into higher-value manufacturing and other competitive industries.

The United States remained the top destination for Philippine-made goods in September, taking $2.63 billion, or 26.6% of the total. It was followed by Hong Kong with $1.55 billion (15.7%); China with $1.12 billion (11.3%); Vietnam with $785.15 million (8%); and Japan with $619.17 million (6.3%).

Imports Accelerate

Imports of raw materials and intermediate goods surged 56.8% to $6.71 billion, accounting for 44.6% of September's total. Capital goods imports inched up 1.4% to $3.93 billion, making up 26.1% of the September import bill.

By commodity group, electronic imports jumped 87.4% to $5.8 billion in September from $3.09 billion last year. Semiconductor imports, which accounted for 32.2% of imported electronic goods, more than doubled to $4.85 billion — a sum that, alongside the $5.68 billion in chip exports, made semiconductors the dominant item on both sides of the ledger and tied the month's trade outcome closely to global electronics demand. Imports of mineral fuels, lubricants and related materials rose 53.3% to $1.97 billion, reflecting elevated energy prices amid the Middle East war.

Chinabank Research said import growth was driven mainly by essential goods, particularly key agricultural inputs, food items and fuel. It added that the 1.4% increase in capital goods imports may indicate "subdued investment demand."

"Consumer goods imports contracted 4.2% for a second consecutive month, suggesting continued weakness in household spending. Durable goods declined after three months of growth, as passenger car and motor vehicle imports pulled back from their sharp increases since June," Chinabank Research said.

South Korea was the top source of imported goods in September at $3.92 billion, or 26.1% of the total, overtaking China, which accounted for $3.36 billion (22.3%). Indonesia followed with $994.43 million (6.6%), Japan with $952.13 million (6.3%), and the United States with $744.66 million (5%).

---

This story was originally reported by Beatriz Marie D. Cruz, Senior Reporter, and published by BusinessWorld on October 30, 2026. Original article