The Department of Finance (DOF) expects strong growth in imports in the early part of the year, boosted in part by a sharp increase in the imports of election-related materials, to help support robust growth in the coming months, DOF Undersecretary Gil Beltran said in an economic bulletin for January forwarded to the media over the weekend.
There was a 105.9-percent surge in imports of pulp and waste paper products in January compared with a year ago, a result of demand for printed products during the campaign period leading up to the May 9 elections.
Aside from election-related materials, Beltran also noted the increase in imports of capital goods and raw materials, which suggest robust manufacturing output in the coming months.
January imports of capital goods soared by 80.4 percent to $2.573 billion from $1.426 billion the same month a year ago, while raw materials and intermediate goods saw 12 percent increase in imports worth $2.475 billion from $2.21 billion in January 2015, the bulletin pointed out.
“The continued increase in imports of capital goods and raw materials suggests robust manufacturing out put ahead. Despite external headwinds, the country’s Purchasing Manager’s Index (PMI) stays above 50, which signals expansion,” Beltran said.
“Given this development, the government should tap alternative sources of inputs to diversify risks brought by uncertainties in the international economy. The country can tap membership in FTAs [free trade agreements]to access new markets,” Beltran said.
Despite the overall positive outlook, Beltran expressed concern for the agricultural sector. Government should, he said, “intensify support for drought-resistant crops. The country’s scientists may need to look into varieties that are less water-intensive,” he added.
El Niño has adversely affected the agriculture sector with a prolonged dry spell since last year, resulting in reduced productivity. Beltran noted that the country’s import on fruits and vegetables in January was 73.6 percent higher than a year ago.
In terms of commodity crops, rice imports in January rose by 79.5 percent due to the government’s mandate to provide for and sustain the country’s requirements for rice amid the continued dry spell brought by El Niño.
Citing January data from the Philippine Statistics Authority (PSA), Beltran said total merchandise imports during the month went up by 30.8 percent to $6.825 billion, which is a rebound from the 13.1 percent contraction in the same month last year.
Electronic inputs remain the top import for the said month, accounting for 32.4 percent of total imports amounting to $2.21 billion and growing by 67.1 percent year-on-year.
Beltran said the expansion in electronic inputs imports “imply robust electronics exports and construction.”