(Updates with additional details from the PSA, comments from NEDA)
PHILIPPINE merchandise imports dropped for the second consecutive month in April in line with the economic slowdown in Asia, the National Economic and Development Authority (NEDA) said.
Imports fell 12.8 percent from a year earlier, with the total value of imports down at $4.677 billion in the fourth month of this year from $5.366 billion in April 2014, preliminary data from the Philippine Statistics Authority (PSA) showed on Thursday.
The contraction reverses the yearearlier expansion of 4.1 percent, and widens a revised 6.5 percent decline in March.
The trade balance in April swung to a deficit of $301 million from a $246 million surplus in March.
Mineral fuels, lubricants lead decline
The NEDA said sharp declines in two major commodities caused the significant overall drop in imports.
In a statement, the agency said imported mineral fuels and lubricants fell 53.9 percent from a year earlier, while raw materials and intermediate goods declined 12.8 percent.
Electronics still top import
Accounting for more than 21 percent of the receipts in April, electronic products remained the top commodity group shipped in during the period at $991 million, a drop of 5.1 percent from $1.05 billion.
China was the top source of Philippine imports, accounting for 16 percent of the total value, followed by the United States, Singapore, Japan, Taiwan, Germany, South Korea, Indonesia, Malaysia and Thailand.
Cumulative trade shrinks
For the first four months of the year, cumulative imports contracted by 6.2 percent to $20.38 billion from $21.71 billion in the year earlier period.
With this the cumulative trade deficit in January to April narrowed down to $1.75 billion from $2.87 billion.
The NEDA said almost all of the East and Southeast Asian region recorded declines in merchandise imports in April 2015, except for Vietnam.
Given an uncertain external environment, Balisacan said it is crucial for the government to ensure that the growth momentum is sustained.
“While the healthy importation of capital goods and consumer durables shows that the country is still on track towards a relatively strong economic expansion, a catch up in government spending could still further boost domestic demand,” he said.
The El Niño phenomenon, although weak, is seen bringing risks and the immediate effect is expected to be felt in the agriculture and industrial sectors.
“The government could also fast-track programs to counter the effects of extreme weather condition, especially on the agricultural and industrial sectors, which are vulnerable to such in the Philippines,” he added.
Demand still robust – NEDA
Despite the 12.8percent yearonyear decline in merchandise imports, domestic demand for capital and consumer goods remains strong, the NEDA said.
Double-digit increases were recorded in the importation of consumer (30.3 percent) and capital goods (13.0 percent).
“Figures on capital and consumer goods reflect the upbeat outlook of consumer spending and is a positive indication of healthy demanddriven activities at the household and industry level,” said Socioeconomic Planning Secretary Arsenio Balisacan.
Consumer goods expanded mainly on the back of robust growth in both durable and nondurable goods.
Increased purchases of passenger cars and motorized cycles, miscellaneous manufactures, and home appliances supported growth in imported durable goods, according to NEDA.
As for nondurable goods, the NEDA noted significant growth in the importation of rice, other food and live animals, and fruits and vegetables.
“The higher import volume of rice recorded as part of consumer goods reflects government’s effort to maintain a sufficient buffer stock of rice ahead of the lean harvest season,” Balisacan said.
The National Food Authority approved the shipment of 500,000 metric tons of rice from Vietnam and Thailand, which started to arrive in March 2015.
For April, the share of rice purchases from these countries represented about 70.6 percent and 29.0 percent of the total rice imports.