An overview of cranes loading ships with containers at the Manila South Harbor port. AFP
IMPORTS in 2015 rose by 2 percent to $66.7 billion, even as the value of shipments declined by 25.8 percent year-on-year last December, the steepest drop since the height of the global economic crisis in 2009.
A preliminary report of the Philippine Statistics Authority (PSA) released Wednesday showed that payments for imported goods in December last year dropped to $4.1 billion from $5.5 billion the previous year.
The value of electronic products that arrived from overseas—mostly components used to assemble semiconductor and electronics, the country’s top merchandise export—declined by 30.3 percent last December, reversing the 43.7-percent year-on-year growth posted during the same month in 2014.
PSA data showed that except for metal products, which recorded a 19.8-percent year-on-year growth, nine of the top 10 imported commodities registered drops in imports at the end of 2015, namely: food and live animals (down 47.9 percent); feeding stuff for cereals (down 33.1 percent); electronic products; miscellaneous manufactured articles (down 18.1 percent); mineral fuels, lubricants and related materials (down 14.1 percent); telecommunication equipment and electrical machinery (down 9 percent); iron and steel (down 5.4 percent); transport equipment (down 3.3 percent); and industrial machinery and equipment (down 3.2 percent).
The contraction posted in December was the fastest drop since the 37.1-percent decline in April 2009.
It also ended six straight months of imports growth since June last year.
For the entire year, the 2-percent increase from $65.4 billion in 2014 matched the government’s 2-percent growth target for 2015.
Citing external risks such as the economic slowdown in China as well as the continuous slide in global oil prices, the Cabinet-level, interagency Development Budget Coordination Committee earlier cut its exports and imports growth targets for 2016 to 5 percent (from 6 percent previously) and 10 percent (from 12 percent), respectively.
Despite the steep drop last December, the National Economic and Development Authority (Neda) expressed optimism that “growing investor confidence in the country will support Philippine imports growth in the near term.”
“Strong domestic demand will prop up imports growth in the near term, as we expect continued expansion in inward shipments of power-generating machines, office and electronic data processing machines, and telecommunications equipment,” Neda Deputy Director-General and officer-in-charge Margarita R. Songco said in a statement.
“Investor confidence in the country is still growing and is seen to increase investments. This will in turn boost demand for imports of capital goods as well as raw materials and intermediate goods,” she added.
In December, the value of imported capital goods, a leading indicator of strong economic activity, remained resilient as it increased 20.9 percent to $1.5 billion, Neda noted.
This accounted for 37.8 percent of total merchandise imports for the period.
“The Philippines’ sound macroeconomic fundamentals should continue to attract attention from investors, both domestic and foreign. The government must pave the way to sustain this renewed interest through institutionalizing reforms from the past five years,” according to Songco. TVJ