PHILIPPINE merchandise imports dropped 6.8 percent in March, reversing robust growth rates in February this year and March of last year, preliminary data from the Philippine Statistics Authority (PSA) showed on Tuesday.
Imports value in March fell to $5.11 billion from $5.48 billion in the corresponding month of 2014.
The decline in March reversed the 10.2 percent imports increase posted in February, as well as the 10.8 percent rise recorded a year earlier.
Total trade in March, however, yielded a surplus of $264 million, swinging back from a revised $837 million deficit in February.
Accounting for more than 24.9 percent of all imports in March, electronic products remained the top commodity group shipped in during the period, costing $1.27 billion. Import of these items expanded 5.4 percent over the year-earlier figure of $1.20 billion.
China was the top source of all Philippine imports, accounting for 12 percent of the total value of inbound shipment in March, followed by the United States, Japan, South Korea, Singapore, Taiwan, Germany, Thailand, Indonesia, and Malaysia.
Cumulative Q1 imports, trade deficit
For the first three months of the year, cumulative imports contracted by 4.1 percent to $15.68 billion from $16.34 billion in the year-earlier period.
With this, cumulative deficit in the trade of goods in the January-March quarter narrowed to $1.43 billion from $2.07 billion a year earlier.
March fall traced to low oil prices
The National Economic and Development Authority (NEDA) traced the fall in March imports to lower crude oil prices and weaker demand for non-oil mineral products.
The lower cost of oil reduced the value of imported mineral fuels and lubricants by 47.3 percent to $681.3 million in March from $1.3 billion a year earlier.
The NEDA noted that global oil prices remained way below $100 per barrel at $51.6 in the first three months of the year.
“The low price of oil prompted an increase in the overall volume of imported crude by 47.8 percent. It is expected that the increase in energy demand during the summer season will further drive imports of petroleum products,” said Socioeconomic Planning Secretary Arsenio Balisacan.
The NEDA said payments for raw materials and intermediate goods dipped by 1.1 percent to $2.09 billion from the year-earlier $2.11 billion, as reflected in the 6.2 percent decline in the imports of semi-processed raw materials.
“The drop in the imports value of semi-processed raw materials can be attributed to decreasing prices of raw materials, a trend which has been occurring for five consecutive months since November 2014,” Balisacan said.
Rise in capital goods, consumer durables
Partly offsetting the drop in imports were increases in the value of imported capital goods and consumer goods of 16.6 percent and 2.8 percent, respectively.
“Growth in the imports of major commodities, particularly capital goods and consumer durables, shows that confidence in the economy continues to be strong and bodes well for growth this year and next,” the socioeconomic planning secretary said.
Balisacan attributed strong growth in capital goods imports in the last two months to brisk business activity in the country.
Net positive consumer sentiment based on the latest round of the consumer expectations survey is expected to continue driving consumption goods imports in the second quarter, he said.
“Also, as the government continues to monitor areas affected by the intense heat due to El Niño, careful planning and timely importation of food products, particularly rice, is critical to ensure stability of food prices, especially in anticipation of an extended dry season,” Balisacan added.
‘Impact on GDP not substantial’
A private analyst said the weakness in March imports is not expected to have a substantial impact on the overall economy as it may be offset by other growth factors such as local consumption and government spending.
“We do not expect a significant impact on GDP growth as other components will support growth – consumption spending will still be solid and government spending is expected to pick up,” Mabellene Reynaldo, analyst at Metrobank Research, said.
Reynaldo also expects import volumes to gain momentum in the next half of the year given the import season.
She qualified her outlook for the second half of the year, however, to consider some technical and seasonal factors, saying, “the higher base in the third and fourth quarters, plus the low price outlook for that time horizon, could still lead to relatively slower import growth,” she added.