THE country's trade deficit narrowed in March as a decline in imports markedly outpaced that for exports, preliminary Philippine Statistics Authority (PSA) data showed on Wednesday.

Total trade in goods contracted by 15.4 percent to $15.44 billion during the month from $18.24 billion a year earlier, with imports totaling $9.31 billion and exports $6.13 billion.

Imports plunged by 20.0 percent, reversing from February's 6.5-percent growth and also markedly faster than the year-earlier 1.2-percent drop.

Exports went down by 7.3 percent, also a turnabout from the previous month's 15.7-percent growth but slightly improving from March 2023's 9.5-percent decline.

Imports comprised 60.3 percent of total external trade in March, and exports accounted for the rest.

The resulting merchandise trade gap of $3.18 billion was smaller than February's $3.66 billion and the year-earlier $5.02 billion.

Exports were still positive year to date, growing by 4.8 percent to $17.98 billion. Imports, on the other hand, fell by 7.6 percent to $29.22 billion.

Electronics remained the country's top export in March, amounting to $3.59 billion or 58.6 percent of total exports and slightly up from $3.56 billion a year earlier.

The United States was the biggest buyer of Philippine-made goods during the month, having purchased a total of $961.94 million or 15.7 percent of total exports.

Rounding out the top five were Hong Kong ($880.88 million or 14.4 percent), China ($837.51 million or 13.7 percent), Japan ($790.02 million or 12.9 percent) and South Korea ($391.59 million or 6.4 percent).

Electronic products were also the Philippines' biggest import for the month at $2.01 billion or 21.6 percent of the total. This was lower than the year-earlier $2.36 billion.

China was the country's biggest supplier, providing $2.27 billion worth of goods or 24.4 percent of total imports.

It was followed by Japan ($794.02 million or 8.5 percent), the USA ($705.85 million or 7.6 percent), South Korea ($698.79 million or 7.5 percent) and Indonesia ($665.49 million or 7.1 percent).

Commenting on the latest merchandise trade data, Pantheon Macroeconomics chief economist Miguel Chanco said the narrower deficit was "the worst possible type as two-way trade both weakened month-on-month."

"The pullback in imports was broad-based, though the silver lining is that it appears to have been caused mostly by commodity-price effects," he added.

"Looking ahead, the steadily improving data from Korea — a much bigger player in global semiconductors — suggest a decent chance that Philippine exports started Q2 on a much better note."

Chinabank Research, meanwhile, said "significant declines in imports of production inputs and consumer goods could signal weaker domestic demand and business confidence, which could portend weaker economic productivity."

However, it added that "growing interest in AI (artificial intelligence) will buoy demand for semiconductors and support a year-on-year improvement in exports performance this year."