According to the Institute for Development and Econometric Analysis, Inc. (IDEA) NewsBriefs, a regular publication produced by IDEA, Inc., April saw a 7.4 percent increase in merchandise imports, summing up to US$5.141 billion compared to the US$4.788 billion amount from the same period last year.
Growth was attributed to improvements in seven out of ten major commodity groups. Commodity groups included Mineral Fuels, Lubricants and Related Materials which grew by 21.4 percent from last year, Transport Equipment which rose by 14.6 percent, Industrial Machinery and Equipment which rose to 9.9 percent, and Other Food and Live Animal which grew by 14.8 percent. Medicinal and pharmaceutical products, organic and inorganic chemicals, and iron and steel also recorded increases.
However, despite the increase in imports of some commodity groups, other groups decreased. Inbound shipments of electronic products that used to produce some of the country’s export products contracted by 19 percent. Moreover, imports for January to April totalled US$19.498 billion, recording a 3.9 percent decrease from the same months last year. This commodity group is used to produce the Philippines’ top export product. Plastics in Primary and Secondary Forms recorded a negative growth rate of 14.1 percent, together with telecommunication Equipment and Electrical Machinery, which declined by 9.8 percent in April.
Likewise as per same published report, stock markets fell this week by 211.12 points, plunging at its lowest value since January 16. Banks insisted, however, that volatility would not stop capital inflows in the country. Strong market fundamentals, a high growth rate from the last quarter and a possible investment grade status maintained the Philippines’ ability to attract investors.
Moreover per IDEA, the Department of Budget and Management released 76 percent or Php1.526 trillion of the national budget as of May 31, with the released budget higher by 14.05 percent of what was released for the same period last year. Budget was allotted for departmental budgets, special purpose funds, automatic appropriations, and interest payments. The DBM’s release sought to improve speed of budget releases and increase efficiency of government spending and delivery of public services.
Furthermore, the peso slipped by 12 centavos against the dollar this week to Php43.84. The depreciation of the currency to is 17-month low is attributed to panic trading that resulted from the reaction of markets to the Fed’s announcement to reducing its bond-buying stimulus. Government officials and investors however, expect the country to withstand volatility.
The Bangko Sentral ng Pilipinas (BSP) is preparing stability measures in light of possible capital inflows in the country, which may affect inflation and exchange rate. Expectations of credit upgrade caused the BSP to recognize possible inflows in the country. Monetary measures will aim to prevent destabilization of capital markets, maintain financial stability, keep a market determined exchange rate, and reap benefits from capital flows, according to the researchers of IDEA.
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