ADB expects Phl imports to outpace export growth

MANILA, Philippines - Philippine imports of goods and services are projected to rise stronger this year, outpacing export growth, boosted by the uptrends in consumption and investment, the Asian Development Bank (ADB) said in a report.

“Improved business confidence and rising inflows of foreign direct investment will support private investment,” the Manila-based lender said in its latest economic publication Asian Development Outlook 2014.

The bank said private consumption will continue to benefit from remittance inflows and positive consumer sentiment, though higher inflation and interest rates will likely dampen the pace of growth in consumer spending.

“This is reinforced by the import intensity of electronics, the main export products. Consequently, declining net exports are expected to restrain economic growth,” it added.

The ADB expects the country’s gross domestic product (GDP) sustaining high rates at 6.4 percent in 2014 and 6.7 percent next year, although easing from 7.2 percent in 2013.

From the production side, the bank expects manufacturing to perform well this year, backed up by robust domestic demand and an improvement in exports as demand from the United States and Europe picks up.

Manufacturing production indices continued to expand through January with gains in chemicals, furniture and fixtures, rubber and plastic products and transport equipment.

“Sustained growth in credit to manufacturers, rising by 12.7 percent year on year in January, and high manufacturing capacity utilization bode well for investment in manufacturing,” the report noted.