The growth in imports was sustained for the fifth straight month in October, jumping double digits at the start of the fourth quarter on the back of “strong investment demand,” the government reported on Tuesday.
A preliminary report of the Philippine Statistics Authority showed that the value of imported products that entered the country last October jumped by 16.8 percent to $6.5 billion from $5.6 billion a year ago.
The imports growth posted in October was the fastest in three months, although slower than the 23-percent jump recorded last July.
At the end of the first 10 months, the imports bill increased by 3.9 percent to $56.5 billion from $54.4 billion in the same period last year.
In a statement, the National Economic and Development Authority (Neda) attributed the robust imports growth last October to “strong domestic demand for raw materials and intermediate inputs, capital and consumer goods.”
“The continuing resurgence of imports is a healthy indication of robust investment demand as it continues to be driven by intermediate and capital goods. The anticipated recovery of the global economy and brisk election spending will continue to drive imports to double-digit growth,” Economic Planning Secretary Arsenio M. Balisacan said.
Balisacan earlier said shipments from overseas would grow at a “much faster” rate to exceed this year’s 2-percent growth target.
“We expect imports to accelerate given the continuing positive sentiments about the economy and the ramping up of infrastructure programs,” Balisacan, who is also Neda director general, said this month.
“The Philippines outpaced its Asian peers as other trade-oriented economies registered declines in imports. Vietnam, which posted positive growth in the previous months along with the Philippines, was marginally down by 1.8 percent in October this year,” Neda noted.
Last October, inbound shipments of raw material and intermediate goods, which accounted for over two-fifths of the country’s total merchandise imports, grew by 40.1 percent year-on-year to $2.8 billion.
As for imported capital goods, which compose almost a third of total imports, the value of shipments rose by 25.4 percent year-on-year to $2.1 billion in October to sustain the double-digit growth rates being registered since March.
“Increasing appetite for capital goods and manufactured goods, such as materials accounting for the manufacture of electrical equipment, signifies an upbeat business sector. This demonstrates the overall business confidence growth of 51.3 percent recorded in the fourth quarter this year from 41.4 percent in the previous quarter, as reported by the Bangko Sentral ng Pilipinas. This is the highest we had in the last two years,” Balisacan noted.
The import payments for consumer goods last October, meanwhile, increased by 4.1 percent year-on-year to $1.1 billion, even as the total import bill for mineral fuels as well as lubricants dropped by a hefty 38.5 percent to $524.8 million that month mainly due to declining petroleum crude prices, Neda said.
“On the back of a weak global environment, the strong growth in shipments of capital goods and consumer goods points to a resilient domestic economy. Supportive policies for a thriving business sector should be continued. These include lowering the cost of and reducing the time for starting a business, reducing red tape and transaction costs, and supporting innovation and technological improvements, among others,” Balisacan said.