Key points

• The Philippines recorded a USD 3.85 billion trade deficit in August, down 3.5% year-on-year and 39.3% month-on-month. This is also the country’s lowest trade deficit since May 2025.
• Export growth accelerated as semiconductor demand remained strong. Meanwhile, import growth slowed due to reduced imports of raw materials, capital goods, and consumer goods.

What’s next

• Metrobank still expects a wider trade deficit in the near term, as the anticipated increase in import volume in September will continue to weigh on the trade balance, further exacerbated by elevated import and shipping costs and a weak peso.  
• Overall, net exports are still expected to weigh on Q3 GDP growth, as the trade deficit in the first two months of the quarter remains significantly wider year-on-year.  
• For local equities, maintain a cautious yet constructive outlook amid renewed global risk-on sentiment. We continue to favor exposure to high-quality and defensive names that could benefit from improved macroeconomic confidence. 

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