Growth of 22.6% highest in 17 months
PHILIPPINE merchandise imports rebounded after three consecutive months of declines, rising 22.6 percent in June to record their fastest rate of year-on-year growth in 17 months, the latest government data showed on Tuesday.
The surge in June also reversed a year-earlier drop of 1.2 percent and a 13.4 percent (revised) slide in May this year.
The total value of imports in June rose to $5.919 billion from $4.829 billion in June 2014, preliminary figures from the Philippine Statistics Authority (PSA) showed.
Accounting for more than 33 percent of the receipts in June, electronic products remained the top commodity group imported during the period, with value surging 120 percent to $1.995 billion in the month from $887 million a year earlier.
Growth also came from the industrial machinery and equipment segment, telecommunications equipment and electrical machinery, other food and live animals, miscellaneous manufactured articles, and cereals and cereal preparations.
The 22.6 percent overall rise in June imports marks the highest growth since January 2014, when inbound shipment jumped 25.7 percent.
June trade deficit
Taking into account the revised export figures for June, the trade balance for the month showed a $555 million deficit, which erased a $507 million surplus from the month earlier.
China was the top source of Philippine imports in June, accounting for 14.9 percent of the total value of the country’s imports that month, followed by the United States, Japan, Taiwan, South Korea, Singapore, Thailand, Malaysia, Indonesia and Saudi Arabia.
Q2 and 6-month gaps
Based on the PSA data, the trade deficit in the second quarter narrowed sharply to $385 million from a gap of $1.453 billion posted in the first quarter.
For the six-month period to June, which was compared with the year-earlier, the trade deficit rose to $1.838 billion from $1.378 billion.
Positive side of rising imports
The National Economic and Development Authority (NEDA) sees the positive side of the surge in import payments in June.
“The increase in importation of raw materials leads us to expect sustained growth in domestic production, while the acquisition of capital goods indicates positive investor confidence,” Socioeconomic Planning Secretary Arsenio Balisacan said in a statement.
The NEDA said the recovery was due to significant increases in the import of raw materials and intermediate goods, capital goods, and consumer goods, which offset the continuing decline in the import value of mineral fuels and lubricants.
The Philippines also ranked first among monitored economies in East and Southeast Asia in terms of imports growth in June 2015, according to the agency.
Except for Vietnam, all these countries registered a fall in imports for the month.
For the remaining months of the year, the NEDA forecasts domestic demand to remain firm enough to support imports growth.
“While there may be a slack in consumer activities during the third quarter of the year due to low seasonal demand for consumer goods, the recovery of government spending should keep imports afloat, particularly on imported capital goods,” Balisacan, who is also the NEDA director general, added.
Looking at the quarterly trade figures – with the trade deficit narrowing sharply to $385 million from a gap of $1.453 billion in the first quarter – an analyst from Standard Chartered Bank said the external drag on growth has eased.
Jeff Ng, Asia economist at Standard Chartered Bank, said given a narrower trade deficit in the second quarter from a quarter ago, and with solid services export growth, he expects the external drag on Philippine gross domestic product (GDP) growth to be less in April to June, compared with January to March.
“It may be a one-off, but shows that domestic demand is still resilient,” he said.