Oil price slump seen behind value growth slowdown
Philippine merchandise imports growth slowed sharply in August to 4.1 percent year-on-year from a revised 23 percent increase in July, the latest government data showed on Tuesday.
Measured in value terms, total imports in August stood at $6.082 billion, against $5.845 billion a year earlier, according to preliminary figures from the Philippine Statistics Authority (PSA).
The government report did not explain the slowdown from July.
However, a private bank analyst traced the easing of imports growth to the plunge in oil prices during the period.
Slump in oil prices
“The slip in imports can primarily be traced to the almost 50 percent contraction in ‘mineral, fuels and lubricants,’ as oil prices nearly halved from August 2014 to August 2015,” said Bank of the Philippine Islands (BPI) associate economist Nicholas Antonio Mapa.
Besides the drop in the value of oil-related commodities imports, there was also a contraction in capital goods as a result of an 80 percent cut in the import of “aircraft, ships and boats,” he said.
Govt presentation of statistics
Focusing on the 4.1 percent year-on-year improvement, the PSA report said five of the 10 major imported commodities posted positive performance.
Accounting for more than 33.7 percent of the import receipts in August, electronic products remained the top commodity group imported by the country, with value rising 68.5 percent to $2.052 billion from the year-earlier $1.218 billion.
August’s inbound shipment was also boosted year-on-year by commodities such as medicinal and pharmaceutical products; miscellaneous manufactured articles; industrial machinery and equipment; and other food and live animals, the PSA said.
China was the top source of Philippine imports in August, accounting for 17.9 percent of the total value that month, followed by the United States, Taiwan, Japan, Singapore, South Korea, Thailand, Malaysia, Indonesia, and Germany.
End-Aug trade deficit
The country’s trade position in August showed a deficit of $954 million, narrowing from $1.519 billion recorded in the month earlier, the PSA report said.
For the first eight months of 2015, cumulative imports totaled $43.651 billion, up a slight 1.5 percent from $43.020 billion in the same period of last year.
The trade deficit for the eight-month period widened to $4.310 billion from a $1.890 billion deficit a year earlier.
Food import amid El Niño
Noting the increase in the import of raw materials, intermediate goods and consumer goods, the BPI analyst said the numbers suggest strong exports in the coming months as exporters load up on raw materials for outbound shipment.
“It also reflects strong domestic demand, especially for durable equipment in cars and home appliances. On the capital goods side, we’re seeing gains in power generating machines, hopefully for power plant construction,” he said.
“Lastly, we’re seeing increased importation of foodstuff, in anticipation of the El Niño dry spell,” Mapa added.