Philippine merchandise imports picked up for the fifth consecutive month in October, accelerating to 16.8 percent year-on-year from September’s revised 8.2-percent increase.
The Philippine Statistics Authority (PSA) on Tuesday said improvements were recorded for six out of the top 10 commodities, supporting overall imports to $6.527 billion from $5.589 billion a year earlier.
The country’s trade position posted a deficit of $1.937 billion, wider than the revised $1.316 billion recorded in September and the $441-million deficit seen a year earlier.
Year to date, merchandise imports totaled $56.527 billion, up 3.9 percent from the $54.392 billion seen in January to October last year.
The trade deficit for the 10-month period increased to $7.656 billion from $2.268 billion a year earlier.
The National Economic and Development Authority (NEDA), in a statement, said strong domestic demand for raw materials and intermediate inputs, capital and consumer goods kept merchandise imports in positive territory.
The NEDA said the double-digit growth of imports was backed significantly by higher importation of raw materials and intermediate goods, capital goods and consumer goods, which grew 40.1 percent, 25.4 percent and 4.1 percent, respectively.
Import payments for raw materials and intermediate goods, which accounted for 42.8 percent of the country’s total merchandise imports, increased to $2.8 billion in October, it noted.
The value of imported capital goods, which accounted for 32.3 percent of total merchandise imports, increased to $2.1 billion.
“Imports of capital goods have been expanding at double-digit rates since March 2015, which bodes well for overall investments growth in 2015,” Socioeconomic Planning Secretary Arsenio Balisacan said.
Increasing appetite for capital goods and manufactured goods, such as materials accounting for the manufacture of electrical equipment, signifies an upbeat business sector, Balisacan added.
“This demonstrates the overall business confidence growth of 51.3 percent recorded in the fourth quarter this year from 41.4 percent in the previous quarter, as reported by the Bangko Sentral ng Pilipinas. This is the highest we had in the last two years,” he said.
The NEDA said the import bill for consumer goods increased by 4.1 percent to $1.1 billion in October 2015, while total import payments for mineral fuels and lubricants declined by 38.5 percent to $524.8 million, “mostly by the volume purchases and price decline of petroleum crude.”
“On the back of a weak global environment, the strong growth in shipments of capital goods and consumer goods points to a resilient domestic economy,” the NEDA chief said.
Electronic products, meanwhile, remained the country’s top import with a 32.2 percent share. In value terms, the Philippines purchased $2.099 billion worth, up 70.7 percent from a year earlier.
China was the top source of Philippine imports in October, accounting for 17.2 percent of the total. Following were Japan, the United States, South Korea, Thailand, Taiwan, Singapore, Indonesia, Malaysia, and Hong Kong.
The Philippines outpaced its Asian peers as other trade-oriented economies registered declines in imports, Baliscan said, noting that Vietnam, which posted positive growth in the previous months, was marginally down by 1.8 percent in October this year.
“The continuing resurgence of imports is a healthy indication of robust investment demand as it continues to be driven by intermediate and capital goods,” he said.
Balisacan also stressed that an anticipated recovery of the global economy and brisk election spending would continue to drive imports to double-digit growth.
Nevertheless, he said supportive policies for a thriving business sector should be continued.
“These include lowering the cost of and reducing the time for starting a business, reducing red tape and transaction costs, and supporting innovation and technological improvements, among others,” he said.