WHY PHILIPPINES EXPERIENCE A WIDENING OF TRADE IMBALANCE IN 2022?

 Philippines Export Data and Philippines Trade Data provider 

In general, the trade deficit is a condition under which the country faces a reduction in its exports and an increase in imports. In simple terms, the trade deficit is when a country spends more on procuring goods from other nations than selling its own produce to them. When this situation arises, it is deemed that the nation is not able to satisfy the demands of its citizens effectively or it’s supply is not able to match the demand of the population. A similar situation is persisting in the Philippines for a long time now. The situation got worse when this trade deficit or trade imbalance grew in the year 2022.



In the year 2022, as per the Philippines Trade Data for that period, the trade deficit grew by almost 38% amounting to USD 58.3 billion. In 2021 this value was near USD 42.2 billion. The value of 2022 becomes scarier when it is compared to the value of 2020 which was just USD 24.6 billion. If we believe the statistics authority of the Philippines, the cause behind this rise is the pandemic when the country imported goods in huge quantities.

IMPORT AND EXPORT STATISTICS OF THE PHILIPPINES

In the year 2022, exports from the Philippines to the world as per the Philippines Export Data grew by 5.6% and touched USD 78.8 billion from USD 74.7 billion in 2021. On the other hand, if we analyze the Philippines Import Data for the same period, then you will be shocked to learn that the imports in the Philippines grew by 17.3%, i.e., from USD 116.9 billion in 2021 to USD 137.2 billion in 2022.

In all, the total trade as per the Philippines Trade Data 2022 accounts for USD 216 billion which is definitely a rise as compared with the total trade of 2021 which was USD 191.5 billion. This growth makes no sense till the time the Philippines start to narrow down its trade deficits by reducing imports and growing exports.

If we go deep into the trade, then on comparing the total trade of the country in the month of December 2021 and 2022, a decrease of 9.9% was observed, i.e., from USD 17.7 billion (2021) to USD 15.9 billion (2022).

 

December was the only month in which a 10% decrease in the trade deficit was observed which was USD 4.6 billion in December 2022, as compared to USD 5.1 billion in December 2021. This was due to the inflation that struck the Philippines accompanied by a fall in consumer demand. As per the Rizal Commercial Banking Corporation chief economist, Michael Ricafort mentioned that December was the only month when the trade deficit was the narrowest since March 2022.

LAST VERDICT

As we saw that the trade deficit of the nation is rising on a constant basis every year, and the only main cause behind this negative Philippines Trade Data is mass imports. These imports are happening mainly because the Philippines is not able to fulfill the demand of its citizens effectively. Being in a trade deficit is not a green signal for any country. it affects many things like foreign investments, bulk orders, and the attraction of big brands. The Philippines should try to narrow its trade deficits significantly to get more support and benefits from foreign brands and investors.

POINT TO BE NOTED

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