Trade gap in 2022 widest in 40 years

MANILA, Philippines — The country’s trade gap swelled to its highest level in over 40 years, the Philippine Statistics Authority (PSA) reported.

Data released by the PSA yesterday showed the country’s balance of trade in goods, or the difference between exports and imports, registered a deficit of $58.32 billion last year, 38 percent higher than the $42.23 billion recorded in 2021.

National Statistician Dennis Mapa said the “2022 deficit is the highest from the beginning of the series in 1980.”

In 2022, the country’s total export earnings reached $78.84 billion, up 5.6 percent from the $74.65 billion in the previous year.

Meanwhile, the country’s total imports grew by 17.3 percent to $137.16 billion last year.

In December alone, the country registered a trade deficit of $4.6 billion, 10.2 percent smaller than the $5.12 billion in the same month in 2021, but wider than the $3.71 billion shortfall in November 2022.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the narrower deficit in December compared to the previous year was largely brought about by the decline in exports amid lower global commodity prices that reduced the value of outbound shipments.

He said the risk of a recession in the world’s biggest economy, the US, also reduced demand for exports.

The country’s total export sales, in particular, declined by 9.7 percent to $5.67 billion in December last year from $6.28 billion in the same month in 2021.

Of the top 10 major commodity groups, the PSA said six recorded annual decreases in terms of the value of exports such as coconut oil (-39.5 percent); chemicals (-24.7 percent); electronic products (-13.9 percent); other manufactured goods (-9.8 percent) such as spectacle lenses of other materials and other cigarettes containing tobacco; metal components (-3 percent); and electronic equipment and parts (-2.7 percent).

Goods imported by the country reached a total of $10.26 billion in December last year, down by 9.9 percent from $11.4 billion in the same month in 2021.

The PSA attributed the year-on-year decline in the value of imported goods in December last year to the decreases in seven of the top 10 major commodity groups, with iron and steel having the fastest annual decline of 41.7 percent.

This was followed by miscellaneous manufactured articles, which dropped by 15.3 percent annually; and transport equipment by 10.9 percent.

Ricafort said imports declined amid the downward correction in prices of global crude oil and other major global commodities imported in the country.