Nov marks sixth straight month of growth
Philippine merchandise imports accelerated for a sixth consecutive month in November, picking up by 10.1 percent from a year earlier but losing momentum from October’s revised 16.9-percent growth.
An analyst said this was a sign that the need for capital goods and raw materials remained strong given domestic demand and infrastructure spending, but warned that the country’s trade deficit could widen given weak external markets.
The Philippines, the National Economic and Development Authority (NEDA) pointed out, ranked first among other Asian economies in terms of imports growth in November 2015.
A Cabinet official, meanwhile, said lower commodity prices, particularly for oil, would benefit the economy as manufacturing costs decrease but warned that the government should be prepared to combat continued global volatility.
The Philippine Statistics Authority (PSA) on Tuesday said growth was recorded for five out of the top 10 imported commodities, boosting overall inbound shipments to $6.095 billion from $5.536 billion a year earlier.
The country’s trade position posted a deficit of $977 million, narrower than the revised $1.944 billion recorded in October but wider compared to the $361-million deficit recorded a year earlier.
Year to date, merchandise imports totaled $62.629 billion, up 4.5 percent from the $59.928 billion seen in January to November last year.
The trade deficit for the 11-month period increased to $8.640 billion from $2.629 billion a year earlier.
The NEDA, in a statement, said continued growth in merchandise imports signified increasing investment demand in the Philippines.
The value of imported capital goods, an indicator of economic activity, grew by 40.8 percent in November 2015, it noted. Import payments for raw materials and intermediate goods, which accounted for 41.4 percent of total imports, also rose by 14.0 percent to $2.5 billion.
Inbound shipments of consumer goods, meanwhile, grew by 8 percent to $1.0 billion on higher purchases of durable goods and home appliances, the NEDA said.
Imports of mineral products and lubricants, on the other hand, declined 40.1 percent, weighed down mainly by lower imports of petroleum crude from Saudi Arabia, Japan and Vietnam.
Socioeconomic Planning Secretary Arsenio Balisacan, however, said the decline in commodity prices, especially for crude, would be beneficial for the local manufacturers.
“We . . . expect the trend of low oil prices to continue as demand softens with slower economic growth. Oversupply could happen as oil-exporting economies continue to produce to drive down prices and maintain market share,” he noted.
Jeff Ng, economist at Standard Chartered Bank, said import growth continued to be driven by strong demand for capital goods and raw materials, which he said could be traced to consumer and infrastructure spending.
The wider trade deficit as of end-November, Ng said, was due to a combination of weak external and stronger domestic demand.
“Export growth near-term should still remain downwardly impacted by sluggish external demand,” he said.
Electronic products remained the country’s top import with a 35 percent share. In value terms, the Philippines purchased $2.131 billion worth, up 68.8 percent from a year earlier.
China was the top source of imports in November, accounting for 16.7 percent of the total. Following were Japan, the United States, Taiwan, South Korea, Thailand, Singapore, Malaysia, Indonesia and Hong Kong.
The NEDA, in noting that the Philippines was the top importer in the region, said that with the exception of Vietnam that recorded 6.6-percent imports growth, other Asian economies such as China, Thailand, Hong Kong, Singapore, Taiwan, Japan, Malaysia, South Korea and Indonesia posted declines during the month.
Balisacan, the NEDA director general, urged the government to continue being vigilant against possible external shocks, considering uncertainties stemming from the impact of monetary tightening in the United States, an economic slowdown and structural transformation of China and the continued geopolitical tensions in various regions.