The country’s exports and imports continued to plunge in May amid a global coronavirus pandemic, the Philippine Statistics Authority (PSA) said on Friday.

Merchandise exports shrank by 35.6% from a year earlier to $3.99 billion last month after a 49.9% yearly decline in April, preliminary trade data showed.

Merchandise imports also plummeted by 40.6% to $5.85 billion last month after a 65.3% drop in April.

“The slower decline in trade performance is a welcome indication that economic activity has started to pick up with the relaxation of quarantine measures in certain areas, the gradual reopening of business, and the restarting of production in both the country and its trading partners,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a statement.

The May figures marked the 13th and third straight month of decline for imports and exports, respectively.

This brought five-month exports to $22.56 billion, a fifth lower than a year earlier and worse than the 4% contraction expected by the Development Budget Coordination Committee (DBCC) this year.

Imports from January to May also dropped by 29.9% to $32.4 billion, against the DBCC’s target of a 5.5% contraction for the year.

The trade deficit was $1.87 billion, narrower than the $3.65-billion shortfall a year ago. The year-to-date trade deficit was $9.84 billion, smaller than the $17.79-billion gap a year earlier.

The slower decline in May showed the “shock effects of the lockdown were less,” George N. Manzano, an economist at University of Asia and the Pacific and a former tariff commissioner, said in an e-mail.

“It could also mean that the inventory of needed materials has been depleted, necessitating the need to import,” he added.

Among the major types of goods, import of raw materials and intermediate goods shrank by 31.3% year on year to $2.54 billion in May.

Imports of capital and consumer goods also shrank by 37.7% ($2.01 billion) and 37.6% ($1.02 billion), respectively. Mineral fuels, lubricants and related materials also posted an 80% decline to $242.45 million.

Meanwhile, manufactured goods declined by 37.2% to $3.18 billion in May. Electronic products, which made up more than half of overseas sales, fell by a third to $2.29 billion. Semiconductors, which accounted for four-fifths of electronic products, declined by 27.2% to $1.83 billion.

“I think as the global economy gradually opens from the lockdown in the past few months, we would see trade — both exports and imports — improving,” Mr Manzano said. “The global supply chains that have been in disrepair are being restructured. So, barring another lockdown from a second wave, the prospects for trade are certainly better in the second half.”

“Electronic exports might still be weak, as shown by anemic imports of electronics (used as inputs for exported products), but better than the period under lockdown,” he added.

Export of manufactured goods, which account for almost 80% of the total, is expected to recover as the latest results of the purchasing managers’ index rose from 40.1 in May to 49.7 in June, Mr. Chua said.

“The Semiconductors and Electronics Industries in the Philippines, Inc. also indicated a gradual pick-up in semiconductor exports in the coming months and projected a flat growth in 2020, notwithstanding the ongoing lockdown in Cebu where some of the electronics firms are located,” he added. — Marissa Mae M. Ramos