Ukraine-Russia conflict has little direct impact on PH trade: BSP

By Joann Villanueva

March 19, 2022, 12:21 pm

MANILA – The Ukraine-Russia conflict is expected to have a limited direct impact on the Philippines’ trade sector, a Bangko Sentral ng Pilipinas (BSP) official said Friday.

The Philippines’ total exports to Russia in 2021 amounted to about USD120 million, or about 0.2 percent of its total exports, while the country’s exports to Ukraine totaled USD5 million, BSP Department of Economic Research Managing Director Zeno Ronald Abenoja said in a virtual briefing aired over the central bank’s Facebook page.

Philippine imports to Russia in the same year comprised 0.6 percent of its total imports, and for Ukraine, 0.1 percent, Abenoja said.

“These numbers indicate that direct trade linkages are quite very, very low. However, probably the impact, the possible ramifications of the tensions in the European region, could be traced more on the impact of the escalation on our major trading partners, including EU (European Union) and the US,” he said.

Abenoja said the war’s bigger impact on the country to date is “probably the elevated prices of international commodities, particularly oil.”

He explained that jumps in oil prices in the international market affect the Philippines’ import bill, which in turn, would result in pressures on the current account and the balance of payments (BOP) position for the year.

Abenoja noted that the baseline projections by monetary authorities for crude oil prices this year have been revised up to an average of USD100 per barrel.

Relatively, the central bank’s policy-making Monetary Board has revised the BSP’s BOP position for this year and the next, given the impact of both domestic and external developments.

The BSP’s latest BOP projection for the year is at a deficit of USD4.3 billion, which is about -1 percent of the gross domestic product (GDP), from a USD7 million surplus, or 0.2 percent of the GDP, in December last year.

This was driven by the change in the current account assumption, which was revised down to a USD16.3 billion deficit from a USD9.9 billion deficit.

This change was traced to the assumption that goods exports would rise by 7 percent from 6 percent and goods imports will increase by 15 percent from 10 percent earlier.

Services exports are also seen to grow by 11 percent from 5 percent, services imports by 12 percent from 10 percent, business process outsourcing by 8 percent from 5 percent, and travel receipts by 100 percent from 25 percent. (PNA)