TREND OF THE PHILIPPINES TRADE DATA WITH RESPECT TO ANNUAL TRADE DEFICIT
MEANING OF TRADE DEFICIT AND ITS IMPLICATIONS
Trade Deficit is a term used to
denote the negative gap between the Imports and Exports made by a country in
one fiscal year. In simple terms, when the value of total imports becomes
larger than the value of total exports, then the situation of Trade Deficit
arises where the outflow of money becomes more than the inflow.
There are two main and biggest
reasons why a country faces a trade deficit. One, when a particular nation is
not able to produce every good domestically, then in order to fulfill the demands
of its citizens, the nation tends to import a variety of goods from different
countries and pay import taxes. Secondly, when most of the companies of a
nation are in the manufacturing business and are set up abroad, importing the
finished products from them incurs a huge cost that escalates the trade deficit
even more.
IMPACT OF TRADE DEFICIT ON COUNTRY
AND ITS CITIZENS
There are various impacts connected
with trade deficits on a country. They are as follows:
·
At the beginning stage, the people of the nation enjoy high
living standards as they get access to every product.
·
If the situation of trade deficit gets longer, then it
affects the currency of that nation and weakens it.
·
Outsourcing of jobs abroad takes place.
·
As the trade deficit grows, the demand for domestic products
gets reduced and it impacts the local manufacturers and sellers.
HOW ARE THE RELATIONS BETWEEN THE PHILIPPINES
AND TRADE DEFICITS?
The Philippines is an Asian country
that is into frequent trade practices. The Philippines has a good percentage
contribution to world trade. In statistical terms, the data revealed by the Philippines Import Data
for the last 5 years are listed below:
|
YEAR |
IMPORT VALUE |
|
2017 |
USD 98.48 million |
|
2018 |
USD 115 million |
|
2019 |
USD 112 million |
|
2020 |
USD 90.75 million |
|
2021 |
USD 124 million |
On the other hand, the values shown
by Philippines Export Data are as follows:
|
YEAR |
EXPORT VALUE |
|
2017 |
USD 63.23
million |
|
2018 |
USD 67.48
million |
|
2019 |
USD 70.33
million |
|
2020 |
USD 63.87
million |
|
2021 |
USD 74.61 million |
On the basis of the statistics
mentioned above, we can say that the country is in a trade deficit by a certain
amount as the Philippines Import Data is always greater than the Philippines
Export Data in these 5 years.
Although the trade deficit keeps on
fluctuating every year. For instance, the trade deficit for the year 2019 was
11.8% more than it was in 2018 and likewise, the trade deficit rose in the year
2021 by 68% as compared to 2020.
As per the latest statistics released
by the Philippines Trade Data for the year 2022, the trade deficit got narrower
in the month of October to some extent where the exports rose more than
imports. The goods due to which the Philippines export data
rose were electric products, aircraft, and motor spare parts. On the other
hand, the major contributors to the Philippines Import Data were metal
scrap, transport items, live animals, and fuels.
CONCLUSION
From the statistics, it is evident
that the relationship between the Philippines and the trade Deficit is going
since a very long time. Every year, there is more or less the same scenario for
the country. As the trend of trade deficit is going on for a long time, the
initial benefits would have been exhausted, and the citizens would be facing
disadvantages now like domestic unemployment and the low value of the currency.
The Philippines should focus more on
producing goods domestically rather than being solely dependent on imports. In
this way, the country could narrow the gap further.
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