Imports rebound to year-high 22.6% growth in June

MANILA, Philippines - The country’s imports recovered from a slump since March this year to post its highest growth for the year at 22.6 percent in June, data from the Philippine Statistics Authority show.

The PSA said spending for imported goods rose to $5.9 billion in June from $4.8 billion in the same month last year. 

It attributed the recovery to significant increases in imports of raw materials and intermediate goods, capital goods and consumer goods, which offset the continuing decline in the import value of mineral fuels and lubricants. 

“The significant surge of import payments signals improvement in the external environment. The increase in importation of raw materials leads us to expect a sustained growth of domestic production while the acquisition of capital goods indicates positive investor confidence,” said Economic Planning Secretary and National Economic and Development Authority (NEDA) director general Arsenio M. Balisacan. 

Furthermore, he said the Philippines ranked first among monitored economies in East and Southeast Asia in terms of imports growth in June 2015. Except for Vietnam, all these countries registered a decline in imports for the said period.  

Accounting for nearly half (48.9 percent) of the country’s total imports, payments for raw materials and intermediate goods posted a positive turnaround, after declining for three consecutive months, at $2.9 billion in June 2015 from $1.9 billion in June last year. 

Moreover, payments for imported capital goods continue to pose double-digit increase for five successive months at $1.3 billion from $1.1 billion in the same month last year.

“The country’s continued robust spending on imported capital goods, particularly office, electrical and telecommunications machines and equipment, bodes well for the growth in capital formation,” Balisacan added.

In a market commentary, Jeff Ng of Standard Chartered Bank said import growth was strong as imports for raw materials, capital goods andS consumer goods rebounded.

 “It may be a one-off, but shows that domestic demand is still resilient,” he noted.

He said given a narrower trade deficit in the second quarter versus the first quarter and also solid services export growth, “the external drag on GDP growth may be lesser in Q2 compared to Q1.”

Meanwhile, overseas spending for consumer goods grew at $807 million in June 2015 from $713.4 million in June last year due to the increased payments for durable goods, particularly for passenger cars and motorized cycle, which reflects an upbeat performance of the country’s automotive industry. 

According to the Chamber of Automotive Manufacturers of the Philippines and Truck Manufacturers Association, a total of 9,840 passenger cars were sold in June 2015. It is 19 percent higher compared to the 8,278 units sold in the comparable period last year.

“For the remaining months of the year, domestic demand is expected to prop up imports growth. While there may be a slack in consumer activities during the third quarter of the year due to low seasonal demand for consumer goods, the recovery of government spending should keep imports afloat, particularly on imported capital goods,” said Balisacan.