BY: E R B E RT L M E D E L L I N

IMPORT AND EXPORT

WHAT IS AN IMPORT?

• A good or service brought into one country from another. Along with exports, imports form the backbone of international trade. The higher the value of imports entering a country, compared to the value of exports, the more negative that country's balance of trade becomes

WHAT IS AN EXPORT?

• A function of international trade whereby goods produced in one country are shipped to another country for future sale or trade. The sale of such goods adds to the producing nation's gross output. If used for trade, exports are exchanged for other products or services.

WHY DO COUNTRIES IMPORT?

• 1. it simply does not exist in the country: a mineral which is not in the country's soil, an agriculture product that can't be produced there, an innovation that has been introduced in other countries;• 2. it does not exist at a specific level of quality; thus,

a country imports better products than domestic production, also as far as advertising or packaging are concerned;• 3. it represent a product variety that is appreciated

domestically but not produced exactly in this horizontal or mixed differentiation;

WHY DO COUNTRIES IMPORT?

• 4. it is cheaper abroad, since producers there are more efficient, are faced by lower costs, better exploit economies of scale and/or accept lower profits;• 5. at the current domestic price, producers do not

supply enough good or service as the demand requires, also because of ex ante coordination problems; accordingly, consumers buy abroad for insufficient domestic production.

WHY DO COUNTRIES EXPORT?

• One can abstract at least 9 possible reasons for which a country may be able to export a certain good or service:

• 1. the country is provided with a specific good which does not entirely uses, as it happens with oil in agriculture-oriented nations;

• 2. the country has been the first to introduce a new product that is demanded worldwide;

• 3. the country has the cumulated knowledge to produce better quality products that are recognized by foreign public;

• 4. goods are there horizontally different by those produced abroad (e.g. domestic firms have a specific brand connotation);

WHY DO COUNTRIES EXPORT?

• 5. competition may be less intense abroad and quality requirements be lower;

• 6. the process of production is characterised by economies of scale, i.e. a falling price/better quality for larger and larger quantities produced, and the domestic market is not wide enough for reaping those benefits;

• 7. for whichever reason, production cost is lower than in other countries;

• 8. the price at which the good can be sold abroad is larger than domestic prices (even taking into account transport, tariffs and other export costs);

• 9. a domestic contraction of demand may have pushed the producers to find out new markets for their existing production capabilities.

TOP EXPORTS OF THE PHILIPPINES

NATURAL RESOURCES EXPORTS OF THE PHILIPPINES

• TABLE 2 Philippine Exports by Commodity Group_Jan2014 & Dec&Jan2013.pdf

SMUGLING IN THE PHILIPPINES

• Smuggling is the illegal transportation of objects, information or people, such as out of a house or buildings, into a prison, or across an international border, in violation of applicable laws or other regulations.

WHY DO THEY SMUGGLE?

• There are various motivations to smuggle. • drug trade, • in illegal immigration or illegal emigration, • tax evasion, • providing contraband to a prison inmate, or the

theft of the items being smuggled. • Examples of non-financial motivations include

bringing banned items past a security checkpoint (such as airline security) • or the removal of classified documents from a

government or corporate office.

EFFECTS ON THE PHILIPPINE ECONOMY

• Raymond Palatino (2008), reports • "The extent and impact of smuggling in the Philippines"

that Smuggling is a serious problem that hurts the country in many ways.

• It deprives government of revenues from uncollected taxes and customs duties.

• It affects local industries by distorting prices of commodities.

• Smuggling causes production slowdown, which leads to mass lay-offs, reduced consumer spending, bankruptcies, and lower tax collection.

• Smuggling has especially benefited from weak governance and chronic political instability.

SOURCES

• http://www.economicswebinstitute.org/glossary/imports.htm• http://

www.economicswebinstitute.org/glossary/exports.htm• https://psa.gov.ph/sites/default/files/attachments/

itsd/trade/TABLE%202%20%20Philippine%20Exports%20by%20Commodity%20Group_Jan2014%20%26%20Dec%26Jan2013.pdf