FAR EASTERN UNIVERSITY
Nicanor Reyes Street, Sampaloc Manila City, 1008 Metro Manila
In Partial Fulfillment in
Introduction to Economics
An Economic Analysis
Submitted by :
Nicka Casssandra Jerao
Dr. Darwin Bonifacio
Date Submitted :
I. Problem: Import-Export Imbalance
Among the many economic problems faced by the Philippines, the imbalance of imports and exports creates a toll on our development with foreign countries. The negative trade is heavy and only counterbalanced by the service account surplus. Over the last two decades, Philippine exports have shifted from commodity-based products to manufactured goods. However, in the midst of the current global economic recession, the exports of electronics, garments and textiles have yet to reach a level of import neutralization.
Our country produces a variety of different products. But Filipinos don’t give as much patronage to local products as compared to imported goods. If asked, most of our countrymen would prefer purchasing goods from other countries, over products that are domestically grown and produced. Most countries attempt to achieve a trade balance, in which the flow of imports and exports is relatively equal. If a country exports too much, it may not be able to support its domestic needs, while a country which imports excessive amounts of products may not have enough money to support the high volume of imports. In a country with a trade balance, import and export rates are about equal, with nations exporting excess items for sale, and importing the goods that it needs.
Historically, the Philippines has been an important centre for commerce for centuries for its ethnic minority, namely, the Chinese who were also its first occupants. The archipelago has also been visited by Arabs and Indians for the purpose of trading in the first and early second millennium. As of 21st century, the country is member in several international trade organizations including the APEC, ASEAN and WTO.
Since 1980s, the Philippines have opened their economy to foreign markets, and established a network of free trade agreements with several countries. The United States is one of the Philippines top trading partners. In 2010, according to US Department of Commerce dad, trade between the Philippines and US amounts to US$15.4 billion. US is also the Philippines largest foreign investor, with foreign direct investment close to US$6 billion at the end of 2009.
Under the new Aquino administration, the government plans to open up the country to more foreign investment in industries such as business processing operations, mining and tourism. However, this move may be hindered by restrictions such a prohibition of foreign ownership of land and public utilities.
Philippines' Import and Export Indicators and Statistics at a Glance (2010)
Total value of exports: US$50.72 billion
Primary exports - commodities: semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, fruits Primary exports partners: US (17.6 percent of total exports), Japan (16.2 percent), Netherlands (9.8 percent), Hong Kong (8.6 percent), China (7.7 percent), Germany (6.5 percent), Singapore (6.2 percent), South Korea (4.8 percent) Total value of imports: US$59.9 billion
Primary imports - commodities: electronic products, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains, chemicals, plastic Primary imports partners: Japan (12.5 percent of total imports), US (12 percent), China (8.8 percent), Singapore (8.7 percent), South Korea (7.9 percent), Taiwan (7.1 percent), Thailand (5.7 percent)
Although there are many variances that...
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