MANILA, Philippines – Imports grew 3% in April, slower than the rates recorded in previous months, but the government is optimistic growth will pick up in the coming months, the National Economic and Development Authority (NEDA) said Wednesday, June 25.
The buoyant projection for the third quarter is backed by Bangko Sentral ng Pilipinas (BSP) surveys, citing that overall confidence index of businesses rose to 50.7% in the second quarter of 2014 from 37.8% in the first quarter.
Payments for imported goods in April reached $5.3 billion, up 3% from $5.2 billion in the same month last year, though slower than the 10.6% expansion in March and the 7.6% growth in April 2013, according to the Philippine Statistics Agency (PSA).
Meanwhile, total trade-in-goods deficit widened to $2.6 billion in April from $1.7 billion in April 2013.
On June 20, the Development and Budget Coordinating Committee raised the growth forecast for imports and adjusted its forecast for the peso-dollar exchange rate. Economic growth and inflation targets were unchanged.
Import growth forecast for the year was adjusted to 9% from 6%. For 2015, the 7% forecast was raised to 10%, while the 2016 forecast of 9% was hiked to 12%. As such, pressure from imports prompted Philippine economic managers to adjust the exchange rate from P41-P44 per US$1 to P42-P45 for the year until 2016.
The higher import target was due to typhoon reconstruction efforts and expectations that investments are going up.
Top imports
Cumulative imports for the first 4 months of 2014 amounted to $21.53 billion, a 9.9% increase from $19.59 billion in the same period last year.
According to the PSA, the increase in April imports was due to the positive performance of 6 out of the top 10 major commodities for the month, namely:
- plastics in primary and non-primary forms
- iron and steel
- telecommunication equipment and electrical machinery
- mineral fuels, lubricants, and related materials
- organic and inorganic chemicals
- other food and live animals
Imported mineral fuels, lubricants, and related materials comprised the top import group in April, accounting for 27% of the aggregate import bill with value of $1.43 billion, up 11.5% from last year’s figure of $1.29 billion.
Aggregate payment for the country’s top 10 imports for April reached $4.08 billion or 76.9% of the total import bill.
Total bill for purchases of raw materials and intermediate goods amounted to $2.05 billion and accounted for 38.6% of the total imports. It grew 17.6% from last year’s $1.74 billion. Semi-processed raw materials had the biggest share of 36.4%, at $1.933 billion.
The double-digit growth rate of raw material and intermediate good imports was mainly due to the increase in inward shipments of semi-processed raw materials, enough to offset the 27.8% reduction in unprocessed raw materials.
Among semi-processed raw materials, materials and accessories for electrical equipment recorded a 44.6% growth, indicating a possibly much better performance of Philippine electronics exports in the coming months, NEDA said.
Lower importation of capital goods weighed on import growth, NEDA cited. But an increase in imports of capital goods is expected in the near term as a result of the expansion plans of businesses in the industry sector for the next two quarters, NEDA Chief and Socioeconomic Planning Secretary Arsenio Balisacan said.
Payments for inward shipments of capital goods accounted for 22.2% of the total imports, down 19.9% to $1.178 billion in April from $1.43 billion in the same month of 2013.
Purchases of consumer goods recorded an 11.6% share, with value of $615.41 million in April this year, up 0.2% from $613.89 million in April 2013, PSA showed.
Maintaining the favorable market sentiment, together with an accelerated implementation of reconstruction, will be crucial in inducing private sector investment in capital goods, Balisacan said.
“The re-fleeting program of airline companies in line with increasing their flight routes alongside the anticipated rise in purchases of power generating sets to augment the power supply in the country is expected to boost imports of capital goods,” Balisacan said.
China remains top source of imports
The People’s Republic of China remained the top source of the country’s imports with a 15.7% share, amounting to $833.5 million. Second was Saudi Arabia with 8.4%; followed by South Korea (8.3%); Japan (7.6%); United States of America (7.1%); Singapore (6.6%); Germany (5.5%); Indonesia (5%); and Malaysia (4.2%)
The value of imported goods from the Association of Southeast Asian Nations (ASEAN)-member trading partners represented 21.3% of Philippine merchandise imports in April, equivalent to $1.1 billion worth of imported goods.
The European Union (EU) supplied $681.0 million or about 12.8% of the country’s total import requirements during the period. – Rappler.com
Shipyard image from Shutterstock
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