Philippines: Trade deficit narrows in June: Tech exporters start to pass on higher import costs

Research evidence excerpt

Philippines: Trade deficit narrows in June: Tech exporters start to pass on higher import costs

J P M O R G A N Asia Pacific Economic Research

30 July 2026

Philippines: Trade deficit narrows

in June

Tech exporters start to pass on higher import costs

The trade deficit narrowed to US$4.9 billion in June (May: US$6.1 billion, revised Emerging Markets Asia, Economic

higher from US$5.5 billion), coming in ahead of expectations (JPM: US$5.2 and Policy Research

billion; consensus: US$5.3 billion). The better-than-expected print was the result Jin Tik Ngai

of stronger exports relative to import gains (Table 1). (65) 6807 5556

jintik.ngai@jpmorgan.com

JPMorgan Chase Bank, N.A., Singapore Branch

Tech exports make a sterling comeback – Following several months of lull,

electronics exports rebounded strongly and posted a monthly record of US$5.3

billion, driven primarily by semiconductor components (Figure 1). Not

surprisingly, half of last month’s export gains went to the US (the primary end-

consumer of the Philippines’ electronics exports), although it is also worth noting

that shipments to other major trading partners have remained resilient and broad-

based (Figure 2). Our constructive outlook on Philippine exports continues to be

underpinned by the unabated momentum in the global AI-led tech capex cycle

(Figure 3).

Exporters start to pass down higher import costs - One recent key development

is the sharp rise in regional memory chip/GPU prices, which has translated into

higher import costs for the Outsourced Semiconductor Assembly and Test (OSAT)

industry in the Philippines. As a result, the stable and mildly positive electronics

trade surplus fell into a rare deficit in the second quarter (Figure 4). However, this