Double-digit increases in the importation of raw materials and intermediate goods, capital, and consumer goods kept Philippine merchandise imports afloat in September 2015, according to the National Economic and Development Authority (NEDA).
The Philippine Statistics Authority reported yesterday that total payments for imports increased by 6.7 percent to USD 6.2 billion in September 2015 from USD 5.8 billion in the same month last year. This is the fourth consecutive month since June this year that imports have increased.
“Upbeat sentiment from the business sector and an overall improvement in consumer expectations for the coming quarter will likely keep imports afloat, especially those in the manufacturing and construction sectors. Improved purchasing power due to low inflation will also keep consumer demand vibrant in the succeeding months, and will further be ramped-up by holiday spending,” said Economic Planning Secretary Arsenio M. Balisacan.
“The growth registered in capital goods for September (40.7%), which is the highest for the year, is also an indication of robust economic activity moving forward,” he added.
Capital goods increased to USD 2.0 billion from USD 1.4 billion in the comparable period last year. Raw materials and intermediate goods also increased by 20.1 percent in September 2015 to reach USD 2.7 billion compared with USD 2.2 billion recorded in the same month last year. Raw materials and intermediate goods serve as inputs in the production of final goods, while capital goods include equipment and materials in which firms invest to expand production and make production more efficient.
Import bills for consumer goods also grew by 10.1 percent to USD 876.8 million in September this year from USD 796.4 million in September 2014, mainly on higher purchases of durable goods particularly of passenger cars and motorized cycle.
However, payments for non-durable goods, primarily rice, registered a decrease during the period because of lower rice volume purchased on a year-on-year basis.
“The drop in rice imports may only be temporary as the government allowed for additional rice imports in the fourth quarter of the year given the prevailing El Nino, which is still affecting domestic rice production,” said Balisacan, who is also NEDA’s director-general.
Among the monitored trade-oriented economies in East and Southeast Asia, only the Philippines and Vietnam recorded positive imports in September this year.
Trade-in-goods deficit expanded to USD 5.6 billion for January to September 2015 compared with USD 1.8 billion deficit in the same period last year. The increase in trade deficit was due to the 24.7 percent decline in merchandise exports recorded in September 2015, the largest contraction since September 2011.
“On the back of sluggish global growth, economic policies should continue to encourage investments that cater to domestic demand. Continuous improvements in product quality, innovation and infrastructure support to local industries should be sustained in order to elevate the competitiveness of the domestic industries, and make them at par with imported products,” Balisacan said.
“Local industries can also take advantage of the lower prices of commodities in order to beef up inventory and expand capacity. At the same time, the purchasing power of consumers, especially the poor, needs to be strengthened,” he added.