PH imports drop 14.2% in January
MANILA, Philippines – Total merchandise imports saw a month-to-month drop, as the January figure decelerated further to 14.2% – the steepest drop in 3 years, the National Economic and Development Authority (NEDA) reported Wednesday, March 25.
December 2014 merchandise imports dropped to 10.6%, pulling the full-year 2014 imports growth to 2.4%.
Plunging oil prices in the world market generally contribute to the drop in the latest merchandise growth figure, NEDA said.
“Over the medium term, payments for imported crude oil may remain lower, tempering the total value of Philippine merchandise imports in 2015,” said Economic Planning Secretary Arsenio M. Balisacan.
Balisacan added that with the oil inventories remaining at high levels and with moderate global growth projections continuing to limit energy demand, it may take time for crude oil prices to fully recover to the more than $100 per barrel annual average price in 2011 to 2013.
And to offset the reduced government customs revenues from lower oil prices, Balisacan is recommending to increase the excise taxes on petroleum products.
“This should be designed in a way that the benefits of declining oil prices are shared between the government and the private sector, while moderating the impact on the environment,” explained Balisacan.
Efforts to make the country more conducive to investments to complement the benefits of lower oil prices should be continued, he added.
“This would be a good opportunity for major industry players to lower costs, boost profits, and ramp up expansion in investments,” Balisacan said.
Payments for mineral fuels and lubricants, capital, and consumer goods contracted in the period.
Total import payments fell to $5.1 billion in January 2015 from $6 billion in the same period last year, according to a report of the Philippine Statistics Authority (PSA).
The latest total import payments was a reversal from the 0.4% year-on-year growth in December 2014 and 24.7% expansion in January 2014.
The 4.3% increase in the purchase of raw materials and intermediate goods, which accounts for 48.4% of the country’s total imports, was not able to pull up the reduced payments for mineral fuels and lubricants, capital, and consumer goods in January 2015.
The trade-in-goods deficit, meanwhile, narrowed to $0.8 billion in January 2015 from $1.6 billion in the same period in 2014, attributed to the steeper decline in import payments, compared with the decrease in exports at 0.5%.
Despite the declines, the buoyant outlook on the domestic economy is expected to support higher imports of raw materials and intermediate goods, capital goods, and consumer items.
Businesses also wanting to expand, particularly in the manufacturing sector, are also seen to boost export-oriented industries in the coming months, Balisacan said.
But manufacturing growth was at its slowest in January, attributed to the decline in demand post-holiday season.
The normalization in ports operations, along with the major port projects to be implemented by the Philippine Ports Authority this year are also expected to further improve trade facilitation, eventually increasing external trade.
China remains the top supplier of imported goods, with a share of 15.4% of the total value of inward shipments.
Singapore followed at 9.1%; United States of America, 9: Germany, 8.2%; Japan, 7.7%; Taiwan, 7.2%; South Korea, 6.5%; Thailand, 5.1%; Saudi Arabia, 4.7%; and Malaysia, 4.2%. – Rappler.com