Philippines and Indonesia Report Widening Trade Deficits for May 2026

Southeast Asian economies faced trade imbalances in May 2026, with both the Philippines and Indonesia reporting deficits. The Philippine Statistics Authority reported that the Philippines' trade-in-goods deficit widened by 50.5 percent to $5.48 billion. This increase was driven by a 21.9 percent surge in merchandise imports to $13.36 billion, particularly for semiconductors and capital goods, while exports rose 7.6 percent to $7.87 billion due to the artificial intelligence boom.

Simultaneously, Indonesia recorded a trade deficit of $1.61 billion, its first in six years. Statistics Indonesia attributed this reversal to a 71 percent surge in oil and gas imports to $4.51 billion, caused by higher global prices linked to the Iran war and a weakening rupiah. While non-oil and gas products remained in surplus, the country's oil and gas exports fell 32 percent to $760 million amid weak global demand.

Economic risks persist for the region. In the Philippines, analysts pointed to infrastructure bottlenecks at Ninoy Aquino International Airport and potential U.S. tariffs regarding digital service taxes and forced labor as threats to future trade momentum.