Philippine merchandise imports in September fell 2.6 percent in value terms from a year earlier, calling attention to the risk of successive import declines which economists said could eventually drag the country’s exports as well.
Total import payments in September dropped to $5.568 billion from $5.719 billion in the corresponding period of 2013, data from the Philippine Statistics Authority (PSA) showed on Tuesday.
Three of the top 10 major commodities accounted largely for the fall in imports during the month. These are transport equipment, which registered a 43.1 percent import drop, electronic products with 22 percent and food and live animals with 0.9 percent, according to the official figures.
For the nine months to September, cumulative imports remained on the rise, but registered only a 3.4 percent increase in import receipts to $48.134 billion from $46.529 billion in the same period a year earlier.
From the perspective of trade balance, surpluses make the country’s economic growth numbers look good, but a private economist interviewed by The Manila Times said the surplus that the country now enjoys has started to look artificial in nature and may even be a troubling sign.
Nicholas Mapa, who works as an associate economist at the Bank of the Philippine Island, noted that the September drop in imports stood in contrast to the rising revenue collections by the Bureau of Customs, which in the following month, October, recorded a 22.6 percent increase.
The PSA data showed that the balance of trade in goods in the Philippines in September had a surplus of $281 million, a reversal of the $663 million deficit in the same period of last year.
“It’s a troubling sign to see electronics imports slowing down while we’ve seen months of strong exports. Sooner or later we will run out of inventory to build and assemble, which could result in higher imports of raw material while a slowdown in exports as we run out of components,” Mapa said.
“Although we are now enjoying a trade surplus, I feel eventually we will need to replenish our inventory, which could result in larger trade deficits down the line,” he added.
The head of the National Economic and Development Authority (NEDA), the country’s official economic planning body, said the government needs to monitor closely the successive declines in the importation of materials and accessories for the manufacture of electronic equipment as that could be a leading indicator of the country’s external prospects, especially in the exports of manufactured goods.
In a statement issued on Tuesday, NEDA chief and Economic Planning Secretary Arsenio Balisacan stressed that in time for the anticipated increase in economic activity toward the end of the year, the government should remain vigilant on the logistical challenges that may arise especially those involving the importation of consumer goods.
Sounding more optimistic about the imports prospects for the full year, Balisacan cited seasonal factors for the weak September import performance and said that inbound shipments of goods normally pick up during the last quarter of the year.
He said the overall growth trend of imports remains anchored on general economic sentiment for the period.
The “current quarter outlook index for both consumer and business confidence shows a relatively weaker traction due to seasonally weak demand and a slack in industrial production. Still, imports are expected to pick up in the beginning of the fourth quarter in time for the holiday season,” he explained.
China remained the top source of Philippine imports in September, with a 14 percent share of the total or $781.01 million worth of merchandise in September. Other top sources were Taiwan, the United States, Japan, and South Korea