Imports contracted in Q1

Merchandise imports in the first quarter of 2013 contracted as lower inbound shipments in March extended the contraction since January this year, indicating slow factory and exports growth for the period amid a weak global economy.

National Statistics Office data showed that first quarter imports dropped 7.4 percent to $14.357 billion from $15.509 billion in the same quarter last year.

On a positive note, imports of raw materials and intermediate goods moderated the decrease in merchandise imports in March 2013, the National Economic and Development Authority (Neda) said.

“Improved consumer and business confidence lifted overseas purchases of raw materials and intermediate goods, consumer goods and capital goods in March,” Socioeconomic Planning Secretary Arsenio M. Balisacan said.

The moderate gains in imports of capital goods show businesses are continuing expansion plans in the first quarter of 2013, he added.

In terms of exports prospects, however, Dr. Cid L. Terosa of the University of Asia and the Pacific said in a text message that the contraction of imports in the first three months of the year “reflects slow factory and export growth” due primarily to external factors such as the weak economies of the Philippines’ major trading partners.

“The world economic outlook for the remaining months of the year is crucial for both our imports and exports,” he said.

For March alone, imports went down by 8.4 percent year-on-year to $4.922 billion from $5.371 billion.

This, as inbound shipments of five out of 10 major commodity groups contracted: mineral fuels, lubricants and related materials; organic and inorganic chemicals; plastics in primary and nonprimary forms; industrial machinery and equipment; and electronic products.

With the decline of imports for the third consecutive month and the recovery of exports in March, the Philippines’ trade in goods deficit narrowed to $2.3 billion from $2.6 billion in the same period last year.

Electronics, which comprised about a fourth of the import bill for March, amounted to $1.246 billion or 0.6 percent down from $1.254 billion in March 2012.

Semiconductors, which has the biggest share of 19.4 percent,

increased by 3.4 percent year on year to $954.97 million from $923.68 million.

China was the top source of imports with an 11.5 percent share at $564.45 million (0.4 percent up from $562.39 million in March 2012).

The United States came next with an 11.1-percent share, followed by Taiwan (10 percent), Japan (9.6 percent) and South Korea (8.5 percent).

Imports of raw materials and intermediate goods slightly rose to $1.9 billion in March 2013 as a result of higher payments for both unprocessed (7.9 percent) and semiprocessed raw inputs (0.6 percent). Payments for imported consumer goods also went up by 3.2 percent to $612.5 million in March 2013. Likewise, import payments for capital goods increased to $1.32 billion in March 2013, supported by gains in aircraft, ships and boats (34.8 percent), telecommunication equipment and electric machines (2.4 percent), and power generating and specialized machines.

Meanwhile, the value of imported mineral fuels and lubricants was down by 18 percent to $1 billion as lower import bill for petroleum crude (-64.7 percent) offset the higher import payments for other mineral fuels and lubricants (38.6 percent) and coal and coke (68 percent). During the period, the price of Dubai crude fell by 13.8 percent to $105.4 per barrel following expectations of a weak global demand for the commodity.

Bangko Sentral ng Pilipinas’ Consumer Expectations Survey show that consumers generally perceived the first quarter of 2013 as a favorable time to buy durable items.

Also, members of the Chamber of Automotive Manufacturers of the Philippines Inc. and the Association of Vehicle Importers and Distributors Inc. both reported annual increases in car sales.