Imports jumped 21.8% to $5.8B in January

MANILA, Philippines—The country’s imports rose by more than a fifth in January, pointing to the possible sustained recovery of the local manufacturing sector amid strong demand as a result of rosy business outlooks and typhoon-related reconstruction efforts.

“Growth in January 2014 suggests that imports could be trending upwards in line with the expected recovery in exports,” Neda director general and Economic Planning Secretary Arsenio M. Balisacan said in a statement.

The value of goods imported for the month stood at $5.8 billion, up 21.8 percent year on year. This outpaced the 9.3-percent expansion in exports, widening the country’s trade deficit for the month to $1.4 billion from $716.3 million the same month last year.

Balisacan said growth in imports, an indication of higher demand from both consumers and businesses, reflected the optimistic outlook of the private sector in their own operations.

He cited the latest central bank business expectations survey (BES), which showed businesses expected a second-quarter uptick in economic activity, based on new construction projects, both public and private, boosted by rehabilitation efforts from Typhoon Yolanda.

“Also contributing to the outlook are the brisk business prospects arising from companies’ competitive marketing strategies,” Balisacan said. “Raw materials and intermediate goods and mineral fuels and lubricants largely contributed to the robust import growth during the month.”

Import of raw materials and intermediate goods reached $2.2 billion in January 2014, up 27.3 percent from $1.8 billion in January 2013. This was due to increased payments for semi-processed goods that grew by 37.5 percent during the period.

Meanwhile, imports of consumer goods also expanded in January this year, growing by 23.2 percent to $766.9 million. Capital goods grew by 7.9 percent to $1.5 billion in January.

Major sources of imports were China, accounting for 14.7 percent, the United States (10.6 percent), and South Korea (8.7 percent).