THE country’s expected positive economic performance this year and other concerns such as the shipping crisis will likely widen the country’s trade deficit further, according to local economists.
The Philippine Statistics Authority (PSA) reported on Thursday that the country’s exports and imports grew 14.5 percent and 31.1 percent, respectively. (See story here: https://businessmirror.com.ph/2022/01/27/exports-imports-post-growth-in-2021-psa/)
The same report showed that the Philippines recorded a trade deficit of $43.34 billion in 2021. This is the highest since 2018 when the deficit reached $43.53 billion.
“I expect the deficit to widen this year as the country gears up for accelerated growth,” University of Asia and the Pacific (UA&P) Senior Economist Cid L. Terosa told the BusinessMirror on Thursday.
The shipping crisis as well as rising oil prices were among the major factors that affected global trade last year. Terosa and Ateneo Center for Research and Development (ACERD) Associate Director Ser Percival K. Peña-Reyes said there were already factors that influenced the ballooning of the trade deficit last year.
Based on the PSA data, the Balance of trade in goods (BoT-G), which is the difference between the value of exports and imports, showed the country had a deficit.
In December 2021, this deficit reached $5.21 billion, the highest since the country recorded a trade deficit of $5.74 billion in December 2019.
Ateneo de Manila University John Gokongwei School of Management Dean Luis F. Dumlao said the trade deficit, based on his calculations, has reached around 10 percent of the country’s GDP.
“From [a] trade deficit equivalent to 10 percent of GDP in 2021, I expect [a] trade deficit equivalent to 11.5 percent of GDP in 2022,” Dumlao told the BusinessMirror.
Products
In terms of both exports and imports, electronic products, specifically semiconductors, remain as the country’s top products.
Exports of electronic products as a whole grew 11.9 percent in 2021 while imports of these products grew 19.1 percent last year.
Shipments of these products from the Philippines to various parts of the world amounted to $42.485 billion in 2021 while imports of this commodity amounted to $31.74 billion last year.
Exports of semiconductors grew 7.4 percent in 2021 while imports of the commodity grew 18.1 percent. Semiconductor exports amounted to $31.15 billion while imports reached $21.88 billion last year.
The data showed the commodities that posted the highest export growth in 2021 were Telecommunication, which grew 138 percent; Ceramic Tiles and Décor, 118 percent; Iron & Steel, 93.2 percent; Fine Jewelry, 76.5 percent; and Other Coconut Products, 72.4 percent.
Commodities that posted the lowest export growth were Iron Ore Agglomerates which contracted 48.2 percent; Automotive Electronics, 42.9 percent; Bananas (Fresh), 31.7 percent; Gold, 29.3 percent; and Tuna, 19.4 percent.
In terms of imports, commodities that posted the fastest growth in 2021 were Medicinal and Pharmaceutical Products which grew 99 percent; Mineral Fuels, Lubricants and Related Materials, 91.3 percent; Other Special Transactions, 76.7 percent; Other Crude Materials, inedible, 64.9 percent; and Metalliferous Ores and Metal Scrap, 64.7 percent.