MANILA, Philippines – Singapore-based DBS Bank Ltd. sees import growth slowing down after a strong growth in the first quarter due to robust growth in imports of capital goods due to the May 9 polls.
DBS said the robust growth in Philippine imports of capital goods would moderate once the election effect fizzles out and domestic demand normalizes.
“Once domestic demand normalizes, as the election effect sizzles out, expects import growth to fall,” it said.
The investment bank explained government authorities are not too concerned about the trade balance going forward.
“More importantly, as far as the overall current account balance is concerned, foreign remittances remain above $2 billion per month, more than enough to cover the average $1 billion per month trade deficit over the past year,” DBS added.
Latest data from the Philippine Statistics Authority (PSA) showed imports rose 8.8 percent to $18.60 billion in the first quarter from $17.09 billion in the same period last year.
Imports rose 11.7 percent to $5.69 billion in March due to higher demand for capital goods and consumer goods.
PSA attributed the growth in the import bill to double-digit growth in the value of inbound shipments of iron and steel, industrial machinery and equipment, food and live animals, electronic products, telecommunication equipment and electrical machinery and miscellaneous manufactured articles.
The value of inbound shipments of electronic products in March rose 30.1 percent to $1.764 billion from $1.356 billion in the same period last year. This accounted for 27.7 percent of the total import bill for the month.
Imports of capital goods rose 24.1 percent to $2.14 billion in March from $1.72 billion a year ago. Imports of consumer goods also increased 39.4 percent to $ 1.24 billion from $886.14 million due to higher spending on both durable goods and non-durable goods during the period.