Trade deficit, which is the difference between the value of export and import of a country, jumped by 63 percent in the first month of the year as Filipinos bought more foreign-made products, the Philippine Statistics Authority (PSA) reported on Friday, March 11.

Data from the PSA showed that the country’s trade deficit reached $4.69 billion last January, up 63 percent compared with $2.88 billion in the same month last year. January’s trade deficit, however, was smaller than the $5.27 billion recorded last December.

Incurring a trade deficit is not at all bad because increased imports is also an indicator of a robust domestic demand, but, on one hand, a rising trade deficit negatively affects the peso exchange rate as well as distorts the country's balance of trade.

The PSA data showed that total imports grew 27 percent to $10.74 billion from $8.42 billion a year earlier. Meanwhile, exports increased by only 8.9 percent year-on-year to $6.04 billion from $5.54 billion.

January’s total import marked its 12th consecutive month of positive annual growth.

Most of the imported goods were electronic products valued at $2.79 billion, or a share of 26 percent to the total. Interestingly, electronics is also the country's single largest export. This means, the Philippines imports more electronics inputs to assemble or produce locally for reexport.

The second top import product group is oil-related such as mineral fuels, lubricants and related materials, valued at $1.41 billion (13.2 percent) followed by transport equipment which amounted to $854.27 million (eight percent).

The People’s Republic of China continued to be the top source of import amounting to $2.07 billion, or 19.3 percent of the total.

Republic of Korea followed as the Philippines purchased $1.06 billion worth of goods, while Japan trailed with 946.92 million and United States of America with $765.02 million.

Other major sources of imports were Singapore, $616.7 million; Indonesia, $581.4 million; Taiwan, $572.6 million; Thailand, $564.4 million; Malaysia, P462.1 million; Vietnam, $372.8 million; and other countries, $2.73 billion.

Meanwhile, export marked its 11th consecutive month of positive growth in January as electronics remained the highest in terms of sales with earnings amounting to $3.51 billion, or 58 percent of the total dollar receipts.

Other manufactured goods were the country's second top earner with $450.3 million, followed by cathodes & sections of cathodes, of refined copper which reached $231.74 million.

Sales to the US, comprising 15.5 percent of the total, or $934.77 million in January. Meanwhile, shipments to China, the second largest market, amount to $885.06 million.

Shipments to Japan and Hong Kong reached $826.6 million and $738.9 million, respectively.

Other top markets were the Singapore, $413.5 million; Thailand, $304.3 million; Netherlands, $238 million; Republic of Korea, $ 223.4 million; Germany, $218 million; Taiwan, $189.2 million; and other countries, $1.07 billion.

In 2021, trade deficit ballooned to $43.13 billion, up by 75 percent against the $24.6 billion gap recorded in the previous year.