PH April imports expand 29.2%

PHILIPPINE merchandise imports in April jumped 29.2 percent year-on-year, the fastest growth in more than five years due to a surge in the top nine imported commodities, data released Friday by the Philippine Statistics Authority (PSA) showed. The growth rate in April was significantly higher than the 11.7-percent increase seen in March and was the biggest monthly gain since the 35.6-percent expansion in November 2010, aside from reversing the 5.8-percent decline in imports a year earlier. The overall value of inbound shipments in April rose to $6.53 billion from $5.05 billion a year earlier. The National Economic and Development Authority (NEDA) said double-digit growth in purchases of capital goods, raw materials and intermediate goods as well as consumer goods drove import growth in April. Trade deficit widens The country’s trade balance in April posted a deficit of $2.275 billion, wider than the revised $1.747 billion recorded in March and the $619 million deficit recorded a year earlier. For the first four months of 2016, the trade deficit increased to $7.763 billion from $3.403 billion a year earlier. Merchandise imports from January to April 2016 totaled $25.126 billion, up 13.5 percent from the $22.142 billion seen in the same period last year. Electronic products remained the country’s top import with a 26.7 percent share. In value terms, the Philippines purchased $1.74 billion worth, up 69.9 percent from a year earlier. Other top performing commodities for the month were metal products (91 percent), industrial machinery and equipment (73.9 percent), telecommunication equipment and electrical machinery (72.8 percent), iron and steel (62.9 percent), miscellaneous manufactured articles (34.2 percent), plastics in primary and non-primary forms (31 percent), transport equipment (25.4 percent), and other food and live animals (7.5 percent). “The continued strength of merchandise imports, buoyed by purchases of capital goods and durable goods, hints of a robust economic performance in the second quarter,” said outgoing Socioeconomic Planning Secretary Emmanuel Esguerra. In particular, he said the double-digit growth of capital goods since September 2015 points toward sustained business sector confidence while robust imports of durable consumer goods point towards strong consumer confidence. In April 2016, capital goods registered double-digit growth for the eighth consecutive month, growing by 56.7 percent to $2.2 billion “due to stronger demand for telecommunication equipment and electrical machinery, power generating machines, and land transport equipment,” Esguerra, who is also NEDA director general, said. He said the trend is expected to continue for the rest of the year given that the incoming administration has vowed to maintain infrastructure spending. A renewed focus on the manufacturing sector could further boost demand for capital goods, he added. NEDA also reported that imports for raw materials and intermediate goods increased by 28.9 percent to $2.5 billion, bouncing back from a modest 5.3-percent growth in the previous month. Consumer spending grows Consumer spending is also expected to support the growth of merchandise imports in the coming years, especially if the incoming administration carries out reforms to make income taxes more progressive, said Esguerra. Imports of consumer goods increased by 21.3 percent to $1.1 billion in April 2016 “due to higher spending for durable goods such as passenger cars and motorized cycles, home appliances, and miscellaneous manufactures,” he said. Meanwhile, Esguerra said the sustained increase in imports of passenger cars reflects an important finding of the AmBisyon Natin 2040 that most Filipinos aspire for car ownership. “Given this, implementation of road infrastructure and mass transport projects needs to be accelerated. Problems with respect to licensing and vehicle registration also need to be addressed,” he said. The NEDA chief said imports of petroleum crude are expected to contribute positively to import growth toward the end of the year. The foreseen gradual recovery in oil prices could reduce pressure on the economies of net oil exporting countries, particularly those in the Middle East, he added. “Also, as trade volume picks up, a long-term solution to the congestion in seaports becomes even more imperative. Implementation of the trade facilitation provisions of the recently signed Customs Modernization and Tariff Act will help smooth the flow of goods through Customs,” he added. China was the top source of imports in April, accounting for 20 percent of the total. It was followed by Japan, the United States, Thailand, Singapore, South Korea, Taiwan, Indonesia, Malaysia and Hong Kong.

Source: Manila Time