MANILA -The country’s agricultural trade deficit inched up in the second quarter as both exports and imports declined on the back of the global economic slowdown and lower commodity prices.
In a report, the Philippine Statistics Authority (PSA) said the total balance of trade in agricultural goods went up by 0.2 percent to $2.71 billion in three months ending June from $2.703 billion in the same period a year ago.
Agricultural imports dipped by 10.7 percent to $4.32 billion from $4.84 billion year-on-year but the decline in agricultural exports was larger at 24.4 percent, shrinking to $1.61 billion from $2.13 billion.
This brings the total agricultural trade to $5.93 billion, down by 14.9 percent from $6.97 billion.
Michael Ricafort, Rizal Commercial Banking Corp.’s chief economist, said the tepid performance “could be attributed to slower global economic growth and trade amid risk of economic slowdown or even recession” in the United States and “mostly softer economic data in China.”
Ricafort also said relatively lower commodity prices in the world market in recent months could have pulled down exports and imports.
“The extension of lower import tariffs of these agricultural commodities also partly led to the slower year-on-year decline in agricultural imports and the slightly wider agricultural trade deficit,” he said.
“However, this is offset by the need to import more agricultural products by the country such as rice, corn, pork/meat, among others, in an effort to increase local supplies and bring down local food prices and overall inflation,” he added.
Ricafort said the Philippines is expected to record a wider agricultural trade deficit as it would be prompted to import more agricultural goods as the damage caused by the typhoon season and the risk of the El Niño drought could slash local output and exports.
The top 10 commodity groups contributed $1.56 billion or 96.9 percent of the total export revenues although it decreased by 24.2 percent.
Edible fruit and nuts; peel of citrus fruit melons took the largest share of 32.3 percent to agricultural exports with $521.86 million or 32.3 percent.
The Philippines shipped $175.26 million worth of commodities to Association of Southeast Asian Nations (Asean) member countries, mostly tobacco and manufactured tobacco substitutes.
Malaysia remained the leading buyer of agricultural exports totaling $53.01 million, followed by Thailand with $34.90 million.
Agricultural goods delivered to the European Union (EU) amounted to $255.15 million, the majority of which were animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes.
The Netherlands was still the leading destination of agricultural commodities with $ 125.48 million and Spain was a distant second with $36.48 million.
The same PSA report also showed that the value of top 10 commodity groups purchased abroad stood at $3.65 billion or 84.4 percent of the total, a decrement of 13.7 percent.
Cereals cornered the biggest share with $888.23 million or a share of 20.6 percent.
The country imported $1.55 billion worth of food items from Asean nations, mainly cereals.
Vietnam was the leading supplier with $509.14 million while Indonesia came next with $354.35 million.
It also sourced $405.83 million in commodities from EU countries. Spain was the leading supplier with an import value of $94.31 million.