Imports fall by 6.8% in March

MANILA, Philippines – From a 10.2% rebound in February, merchandise imports contracted by 6.8% in March 2015, the National Economic and Development Authority (NEDA) reported Tuesday, May 26.

Lower payments for mineral fuels, lubricants, and raw materials dragged the merchandise imports performance for the period, reversing the February rebound and the 10.8% annual growth registered in March 2014.

The March merchandise imports were also the lowest value in 9 months, as total import payments fell to $5.1 billion in March 2015 from $5.5 billion in the same period in 2014, the Philippine Statistics Authority (PSA) reported.

Inbound shipments of electronic products were the top imported commodity in March 2015, accounting for 24.9% of the total import bill with value amounting to $1.271 billion, which expanded by 5.4% over last year’s $1.207 billion, PSA said.  

Aggregate payment for the country’s top 10 imports for March 2015 reached $3.727 billion or 72.9% of the total import bill, PSA added.

Lower priced imported oil

NEDA added that lower crude oil prices and lesser demand for non-oil mineral products reduced the value of imported mineral fuels and lubricants by 47.3% to $681.3 million in March 2015 from $1.3 billion in March 2014.

Economic Planning Secretary Arsenio M. Balisacan said the low oil-price condition remains favorable to the current balance of trade, particularly for trade-in-goods of the country, as global oil prices continue to hover way below $100 per barrel at $51.6 for the first quarter of the year.

The balance of trade in goods (BOT-G) for the Philippines in March 2015 registered a surplus of $264.11 million, compared to the $217.27 million deficit in the same period last year, PSA said.

He added that the low price of oil prompted an increase in the overall volume of imported crude by 47.8%.

“It is expected that the increase in energy demand during the summer season will further drive imports of petroleum products,” Balisacan said.

The NEDA director general added that the low price of imported oil bodes well for the industrial sector, particularly for manufacturing and utilities sub-sectors since they highly rely on oil-based inputs.

Payments for raw materials and intermediate goods also fell slightly by 1.1% to $2.09 billion from $2.11 billion in March 2014. This is evident in the strong decline to -6.2% in the imports of semi-processed raw materials.

Decreasing prices of raw materials, a trend for 5 consecutive months since November 2014, contributed to the drop in the imports value for semi-processed raw materials.

Value of goods

The increases in capital and consumers goods also partly mitigated the drop in imports, NEDA said.

The value of imported capital goods, meanwhile, increased by 16.6% while that of consumer goods increased by 2.8%. These increases partly mitigated the drop in imports.

Balisacan noted that the growth in the imports of major commodities, particularly capital goods and consumer durables, shows that the confidence in the economy continues to be strong and bodes well for growth this year and next.

The continuing brisk business activity in the last two months also contributed to the strong growth in capital goods imports.

Balisacan recommended that the government further improve the confidence of investors and consumers to induce more expansion and investment in capital goods.

And as the dry spell prevails, Balisacan said the government should continue to monitor areas affected by the intense heat, and apply careful planning and timely importation of food products, particularly rice to ensure stability of food prices especially in anticipation of an extended dry season.

Overall, except for Vietnam, most trade-oriented economies in East and Southeast Asia posted a decline in merchandise imports in March 2015, NEDA noted. The reduced value of imports primarily from China, South Korea, and Singapore also dragged the imports during the period.

China remained as the country’s biggest source of imports with 12% share in March 2015, followed by the US, including Alaska and Hawaii with 10.7%; Japan including Okinawa came third, contributing 8.7%; Republic of Korea ranked fourth, accounting for 7.7% share; and fifth in rank was Singapore with 7.1%. – Rappler.com