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MANILA, Philippines – Merchandise imports significantly decreased to $4.7 billion in April 2015 or 12.8% from $5.4 billion in April last year, the National Economic and Development Authority (NEDA) said Thursday, June 25.
From January to April this year, total imports dropped by 6.2% year-on-year to $20.38 billion.
Because of the lower oil prices, the value of imported mineral fuels and lubricants (-53.9%), and raw materials and intermediate goods (12.8%) in April 2015 contributed to the overall decrease in imports, based on the Philippine Statistics Authority’s (PSA) latest report. Mineral fuels and lubricants comprise 14.1% of the total import bill.
For the first time in 5 months, electronics fell 5.1% from a year earlier. Electronics comprise 21.1% of the total import bill.
The Philippines imports electronic parts and inputs for assembly into exports, and provides about 10% of the world’s semiconductor manufacturing services, including mobile phone chips and microprocessors.
Despite the April decline, NEDA said double-digit increases were recorded in the importation of consumer (30.3%) and capital goods (13%).
“Figures on capital and consumer goods reflect the upbeat outlook of consumer spending and is a positive indication of healthy demand-driven activities at the household and industry level,” said Economic Planning Secretary Arsenio M. Balisacan.
Consumer goods expand
NEDA said consumer goods expanded mainly on the back of robust growth in both durable goods (17.1%) and non-durable goods (43.4%).
Increased purchases of passenger cars and motorized cycles (15.9%); miscellaneous manufactures (18.7%); and home appliances (17.1%) supported growth in imported durable goods.
As for non-durable goods, significant growth in the importation of rice (1,655.5%); other food and live animals (25.7%); and fruits and vegetables (53.5%) was also seen.
“The higher import volume of rice recorded as part of consumer goods reflects government’s effort to maintain a sufficient buffer stock of rice ahead of the lean harvest season,” Balisacan said.
The National Food Authority approved the shipment of 500,000 metric tons of rice from Vietnam and Thailand, which started to arrive in March 2015. The share of rice purchases from these countries represented about 70.6% and 29% of the country’s total rice imports for April.
External environment uncertain
In terms of country sources, reduced value of imports from China, Japan, and Taiwan largely contributed to the overall decline in imports during the period.
Almost all of the East and Southeast Asian region recorded a drop in merchandise imports in April 2015, except for Vietnam, NEDA noted.
Citing such uncertainty, Balisacan said it is crucial for the government to ensure that the growth momentum is sustained and added that a catch up in government spending could still further boost domestic demand. (READ: Aquino gov’t fails to meet spending targets by 66%)
Balisacan added that the El Niño phenomenon, albeit weak, brings risks and the immediate effect will be felt in the agriculture and industrial sectors. (READ: DA to farmers: Use rainy season to fight El Niño)
“The government could also fast track programs to counter the effects of extreme weather condition especially on the agricultural and industrial sectors, which are vulnerable to such in the Philippines,” he said. – Rappler.com