The Philippines' trade deficit hit a record of $41.44 billion in 2018 as imports shot up while exports declined, according to the Philippine Statistics Authority (PSA) Tuesday.

"(The full-year trade deficit for 2018) is the highest. It really widened since 2016," said Ralph Bareata, supervising statistical specialist of PSA's trade and statistics division, in a phone interview with the Daily Manila Shimbun.

According to PSA's preliminary report, last year's exports dropped 1.8 percent to $67.488 billion from $68.713 billion in 2017.

Imports jumped 13.4 percent to $108.928 billion from $96.093 billion in 2017.

Bareata said the rate of increase in imports is the highest so far.

In a statement on Tuesday, Socioeconomic Planning Secretary Ernesto Pernia said:'' merchandise trade growth in the Philippines and in most Asian economies softened in December 2018.

“Merchandise trade in all the monitored Asian economies continued to weaken in the last month of 2018 as the region began to feel the impact of the weakening Chinese economy and the US-China trade tension,” Pernia said.

“Policy uncertainty remains a threat to global trade, investment, and output, especially as US-China trade tensions continue. To mitigate this impact, the national government should continue to work on legislative reforms that will open up sectors for foreign investment,” Pernia said.

He added that given the widening current account deficit due to the trade gap, the proposed amendments to the Foreign Investment, Retail Trade, and Public Services Acts must be pursued.

“We should encourage foreign firms to transfer their manufacturing facilities in the Philippines and to take advantage of the growing domestic market,” he said. Cristina Eloisa Baclig/DMS