Imports post biggest drop in 6 years

Imports posted their steepest drop in almost six years last May even as the government maintained that volumes remained robust and supportive of manufacturing.

But UK-based Standard Chartered Bank warned that the slower imports to date could also impact on exports growth.

A preliminary Philippine Statistics Authority (PSA) report released yesterday showed that the value of imported merchandise goods slid by 13.4 percent in May to $4.39 billion from $5.07 billion a year ago. According to the National Economic and Development Authority (Neda), last May’s decline was the steepest since October 2009.

The PSA said eight of the 10 major import commodities recorded negative performances that month: Electrical machinery and telecommunication equipment; electronic products; food and live animals; iron and steel; lubricants and mineral fuels; plastics; miscellaneous manufactured articles, and transport equipment.

According to Standard Chartered economist Jeff Ng, “the drop in raw materials imports is somewhat worrying for export growth ahead.” In May, payments for raw materials and intermediate goods from abroad declined by 23.3 percent year-on-year, PSA data showed.

For 2015, the government targets growth of 2 percent for imports and 7 percent for exports.

Also, “if consumer goods imports continue to fall after steady growth earlier this year, it may show some downside risks for private consumption ahead,” Ng said in the bank’s latest market research update issued also yesterday. Last May, the value of consumer products from overseas dropped by 3.4 percent.

As for imported capital goods, these grew double-digits for the fourth-straight month in May, registering a 12.8-percent rise, Neda said in a statement.

The volume of imports last May also increased by 7.1 percent, Neda added.

“Despite lower payments for merchandise imports, more goods were actually being purchased as business sector sentiment for the quarter remains bullish. This is driven by expected robust demand from consumers, expected uptick in construction-related activities and the higher volume of production from the manufacturing sector,” Economic Planning Secretary and Neda director general Arsenio M. Balisacan said.