Agriculture trade deficit widens amid rice, fish imports

THE TRADE DEFICIT in agriculture commodities widened in the third quarter as agriculture exports fell while imports grew sharply, the Philippine Statistics Authority (PSA) said.

The PSA said the Philippines shipped out $1.687 billion worth of agricultural goods in the three months to September, down 4.34% from a year earlier.

Meanwhile, imports of farm products rose 15.48% to $3.536 billion.

As a result, the third-quarter deficit in agricultural commodities was $1.850 billion, up 42.38% from a year earlier.

The agriculture sector accounted for 10.79% or $5.223 billion of total trade worth $48.397 billion in the third quarter.

“The latest increase in the country’s foreign trade in agriculture may be partly attributed to increased imports of rice and other agricultural commodities (after experiencing some local supply shortages in cheaper NFA rice, sugar), as part of the government’s non-monetary measures to improve the local supply of rice, fish, sugar, and other food/ agricultural products, in an effort by the government to lower rice/ food prices in the local market and better manage the country’s overall inflation,” said Michael L. Ricafort, economist from the Rizal Commercial Banking Corp. (RCBC).

“A bigger agriculture trade deficit for the country, especially due to increased importation of rice/cereals, sugar, fish, other food/ agricultural products, is primarily meant to augment local supply to address some shortages of cheaper varieties of rice and other food items and lower prices/inflation, as part of the government’s nonmonetary measures to better manage inflation,” Mr. Ricafort added.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines (UnionBank), said: “This increase [in total agricultural trade] can be attributed to the uptick in imports to address supply issues particularly rice and other basic food products, and, consequently, address heightened price levels in the last 10 months of 2018.”