The imbalance in the country’s trade in goods narrowed slightly in December to $3.75 billion, from the previous month’s $3.9 billion.

The so-called trade deficit reached a record high of $4.21 billion in October last year. In total, the National Economic and Development Authority said imports grew by 13.4 percent for full year 2018, while exports contracted by 1.8 percent.

“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,” Socioeconomic Planning Secretary Ernesto Pernia said in a statement.

Year on year, the December imbalance between exports and imports also dropped from the $3.97 billion deficit recorded in December 2017, the Philippine Statistics Authority (PSA) reported Tuesday.

The drop was attributed to the 9.4 percent decline in imports during the month, or $8.47 billion in 2018 from $9.36 billion in the same month in 2017.

PSA noted contractions in six of the top 10 major import commodities as trigger for the imports decline during the period.

The commodities included transport equipment; miscellaneous manufactured articles; mineral fuels, lubricants and related materials; telecommunication equipment and electrical machinery; other food and live animals; and electric products.

Meanwhile, exports resumed a downward trend, decelerating by 12.3 percent in December to $4.72 billion from $5.38 billion in the same period, 2017.

Export figures were weighed down by decreases in the sales of four of the top 10 commodities, particularly machinery and transport equipment which recorded a 53.1 percent drop during the month.

Coconut oil declined by 24.8 percent, electronic products by 15.2 percent and other manufactured goods by 9.0 percent, PSA said. Electronic products remain the top export with total earnings of $2.70 billion, or 57.2 percent of overall exports revenue during the month.

On the drop in electronic products sales as well as the general export performance, Department of Trade and Industry Secretary Ramon Lopez also pointed at “softening global demand induced by global growth slowdown” paired with uncertainties over US-China trade tensions.

“Electronics supply chain in the region was adversely affected as lower orders from one country can lead to lower orders in other supplier countries,” he said.

Overall, the country’s total trade stood at $13.19 billion in December, down by 10.5 percent from the $14.74 billion recorded value in the same month, 2017.

The bulk of that number, at $8.47 billion or 64.2 percent, were imported goods while exported goods accounted for the rest, $4.72 billion or 35.8 percent.

“In general, we reiterate our views to focus efforts and gather all support in building our capacities for a more robust, innovative, competitive manufacturing sector,” Lopez said.

He said this will allow more import substitution and better export performance down the line, which will address the “perennial issue on trade deficit.”

By economic bloc, majority of the Philippines’ imported goods came from East Asia comprised of countries China, Hong Kong, Japan, Macau, Mongolia, North Korea, South Korea and Taiwan.

Imports to the bloc amounted to $4.07 billion or 48.1 percent of the total, still a 4.9 percent drop from $4.28 billion in December 2017.

Imports from the ASEAN region accounting for 24.5 percent of the total also dropped by 7.9 percent, while imports from the the European Union expanded by 20.1 percent.

China emerged as the country’s largest import supplier in December, accounting for 22.1 percent of the total shares. On the other hand, the United States of America ranked first in terms of exports at $774.37 million.