Leni Robredo

A ‘bad omen’: Imports down 3.3% in March

The contraction means the country's economic woes are not yet over. Imports are mostly raw materials used for exports, a major driver of the economy

MANILA, Philippines – Merchandise imports fell 3.3% in March from a year ago to $5.371 billion, indicating there could be continued decline in demand for the country’s goods in the coming months.

Data from the National Statistics Office showed inward shipments of electronics products, the second biggest import item, plunged 38.7% in March to $1.259 billion. Electronics accounted for 23.4% of total imports. Its biggest component, semiconductors, saw a decrease of 47.1% in March.

Economist Benjamin Diokno said the the contraction in imports “is a bad omen.” 

Imports are raw materials used for the production of the country’s exports, a major driver of the economy. Exports fell 1.2% in March after a growth of 12.8% in February, due to the drastic slowdown in electronics sales overseas.

“The imports data suggest that the electronic industry’s economic woes are not over yet,” Diokno, an economics professor at the University of the Philippines, said in a statement. “Electronics imports is a good predictor of electronics exports, mainly because the latter is heavily import dependent.” 

Diokno said the drop in imports could have been bigger if not for the significant increase in oil imports, which supply most of the Philippines’ energy needs.

Imports of mineral fuels, lubricants and related materials soared 74.4% in March to $1.543 billion, largely because of higher crude prices in the world market.

“The good news is that oil and oil product prices are easing. The bad news is that the fall in oil prices is due to the increasing risk of another global economic slowdown because of the Greek tragedy and China’s soft landing,” noted Diokno.

The Philippine government is projecting the economy to grow 5% to 6% this year. In 2011, the economy grew just 3.7%, mainly on lower export receipts and government underspending, particularly on infrastructure. – Rappler.com

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