FINALS

Question 1

which include all types of physical goods exported and imported

Answer 1

Visible Items

Question 2

which include all those services whose export and import are not visible. e.g. transport services, medical services etc.

Answer 2

Invisible items

Question 3

which are concerned with capital receipts and capital payment.

Answer 3

Capital Transfers

Question 4

is a systematic record of all economic transactions between the residents of the reporting country and residents of foreign countries during a given period of time”.

It is a double entry system of record of all economic transactions between the residents of the country and the rest of the world carried out in a specific period of time

Answer 4

The Balance of Payments

Question 5

The difference between a country’s imports and its exports. the largest component of a country’s balance of payments.

Answer 5

Balance of Trade

Question 6

include imports,foreign aid, domestics pending abroad and domestic investments abroad.

Answer 6

Debit Items

Question 7

include exports, foreign
Spending in the domestic economy and foreign investments in the domestic economy.

Answer 7

Credit Items

Question 8

What is the difference between balance of trade and balance of payments

Answer 8

The Balance of Payment takes into account
All the transaction with the rest of the worlds

The Balance of Trade takes into account all the trade transaction with the rest of the worlds

Question 9

What is the general rule of balance of payments accounting?

Answer 9

If a transaction earns foreign currency for the nation, it is a credit and is recorded as a plus item.

If a transaction involves spending of foreign currency it is a debit and is recorded as a negative item.

Question 10

The various components of a BOP
statement

Answer 10

Current Account
Capital Account
Reserve Account
Errors & Omissions

Question 11

a statement of actual receipts and payments in short period.

It includes the value of export and imports of both visible and invisible goods.

export & import of services, interests, profits, dividends and unilateral receipts/payments from/to abroad

Answer 11

BOP on current account

Question 12

Merchandise: exports - imports of goods
Services: exports - imports of services

Answer 12

Trade Balance

Question 13

Net investment income: net income receipts from assets
Net international compensation to employees: net compensation of Employees

Answer 13

Income Balance

Question 14

Gifts from foreign countries minus gifts to foreign countries

Answer 14

Net Unilateral Transfers

Question 15

records all international transactions that involve a resident of the country concerned changing either his assets with or his liabilities to a resident of another country. Transactions in the capital account reflect a change in a stock – either assets or liabilities.

Answer 15

Capital Account

Question 16

Capital Account balance are classified into two main categories

Answer 16

Direct foreign investments
Portfolio investments
Other capital

Question 17

Three accounts: IMF, SDR, & Reserve and Monetary Gold are collectively called as

Answer 17

The Reserve Account

Question 18

contains purchases (credits) and re- purchase (debits) from International Monetary Fund

Answer 18

IMF Account

Question 19

are a reserve asset created by IMF and allocated from time to time to member countries. It can be used to settle international payments between monetary authorities of two different countries.

Answer 19

Special Drawing Rights

Question 20

The entries under this head relate mainly to leads and lags in reporting of transactions

It is of a balancing entry and is needed to offset the overstated or understated components.

Answer 20

Errors and Omissions

Question 21

means its condition of Surplus Or deficit

Answer 21

disequilibrium in the balance of Payment

Question 22

occurs when Total Receipts exceeds Total Payments. Thus,
BOP= CREDIT>DEBIT

Answer 22

Surplus in the BOP

Question 23

occurs when Total Payments exceeds Total Receipts. Thus,
BOP= CREDIT<DEBIT

Answer 23

Deficit in the BOP

Question 24

What are the causes of Disequilibrium In The BOP

Answer 24

Cyclical fluctuations
Short fall in the exports
Economic Development
Rapid increase in population
Structural Changes
Natural Calamities
International Capital Movements

Question 25

It is concerned with money supply and credit in the economy. The Central Bank may expand or contract the money supply in the economy through appropriate measures which will affect the prices.

Answer 25

Monetary Policy

Question 26

government’s policy on income and expenditure. Government incurs development and non - development expenditure,. It gets income through taxation and non - tax sources. Depending upon the
situation governments expenditure may be increased or decreased.

Answer 26

Fiscal Policy

Question 27

By reducing the value of the domestic currency, government can correct the disequilibrium in the BoP in the economy. This reduces the value of home currency in relation to foreign currency. As a result, import becomes costlier and export become cheaper. It also leads to inflationary trends in the country,

Answer 27

Exchange Rate Depreciation

Question 28

It is lowering the exchange value of the official currency. When a country is in this state of its currency, exports becomes cheaper and imports become expensive which causes a reduction in the BOP deficit.

Answer 28

Devaluation

Question 29

the reduction in the quantity of money to reduce prices and incomes. In the domestic market, when the currency is in this state, there is a decrease in the income of the people. This puts curb on consumption and government can increase exports and earn more foreign exchange.

Answer 29

Deflation

Question 30

All exporters are directed by the monetary authority to surrender their foreign exchange earnings, and the total available foreign exchange is rationed among the licensed importers. The license-holder can import any
good but amount if fixed by monetary authority.

Answer 30

Exchange Control

Question 31

To control this, the country may adopt measures to stimulate exports
like:
export duties may be reduced to boost exports
cash assistance, subsidies can be given to exporters to increase exports
goods meant for exports can be exempted from all types of taxes.

Answer 31

Export Promotion

Question 32

Steps may be taken to encourage the production of this. This will
save foreign exchange in the short run by replacing the use of imports by these.

Answer 32

Import Substitutes

Question 33

may be kept in check through the adoption of a wide variety of measures like quotas and tariffs. Under the quota system, the government fixes the maximum quantity of goods and services that can be imported during a particular time period.

Answer 33

Import Control

Question 34

Under this system, the government may fix and permit the maximum quantity or value of a commodity to be imported during a given period. By restricting imports through this, the deficit is reduced and the balance of payments position is improved.

Answer 34

Quotas

Question 35

are duties (taxes) imposed on imports. When these are imposed, the prices of imports would increase to the extent of this. The increased prices will reduced the demand for imported goods and at the same time induce domestic producers to produce more of import substitutes

Answer 35

Tariffs

Question 36

What are the Philippines’ top export destinations

Answer 36

China
Japan
United States
Singapore

Question 37

What are the Philippines’top import destinations

Answer 37

China
Japan
Korea
United States
Thailand

Question 38

How to register as an importer?

Answer 38

Import Clearance Certificate from the Bureau of Internal Revenue Bureau of Customs (BOC) and set up an account with the Client Profile Registration System (CPRS)

Question 39

How to register as an exporter?

Answer 39

First time exporters need to register
with the CPRS through the Philippine
Exporters Confederation.

Question 40

For importers
Buinesses importing into the Philippines must provide the following documents when their goods arrive:

Answer 40

Packing list;
Invoice;
Bill of lading;
Import Permit;
Customs Import Declaration; and
Certificate of Origin.
Required documents

Question 41

For exporters
Businesses exporting out of the Philippines must provide the following documents before their goods depart:

Answer 41

Packing List;
Invoice;
Bill of Lading;
Export License;
Customs Export Declaration; and
Certificate of Origin.

Question 42

Certain products require government permission to be exported. Below is a detailed list of products requiring additional permission
as well as the concerned government authority:

Answer 42

• Endangered species of flora and fauna (Bureau of Biodiversity Management);
• animal products (Bureau of Animal Industry);
• fish products (Bureau of Fisheries and Aquatic Resources);
• Plants (Bureau of Plant Industry);
• Rice (National Food Authority);
• Radioactive materials (Philippine Nuclear Research Institute) and;
• Sugar and molasses (Sugar Regulatory Administration).

Question 43

Tariffs and Taxes
For importer

Answer 43

The Philippines follows the United Nation’s Standard International Trade Classification (SITC). Import tariffs can range from 0 to 65 percent. Imported goods in sectors which have high domestic production typically incur higher tariffs. For non- agricultural goods, tariffs average at 6.7 percent.

Question 44

Tariffs and Taxes for exporters

Answer 44

The only exported good which incur a tariff are logs at 20 percent.

Question 45

are exempted from paying taxes and tariffs on imported raw material and manufacturing equipment.

Answer 45

Business operating in Special Economic Zones

Question 46

As stipulated in the Customs Modernization and Tariff Act, 2015, the main SEZs in the Philippines
include:

Answer 46

Clark Freeport Zone;
Poro Point Freeport Zone;
John Hay Special Economic Zone;
Subic Bay Freeport Zone;
Cagayan Special Economic Zone;
Zamboanga City Special Economic Zone and;
Freeport Area of Bataan.

Question 47

The Philippines, by virtue of its membership in ASEAN, is also a party to the five FTAs that ASEAN has signed with the following countries or group of countries:

Answer 47

Australia and New Zealand;
China;
India;
Japan; and
Korea