January imports grew at fastest rate in 5 yrs

Amid robust domestic demand and sustained investor confidence, the value of imports in January jumped 30.8 percent year-on-year—the fastest growth rate in over five years, the government reported Wednesday.

Preliminary Philippine Statistics Authority data showed that $6.825 billion worth of imported goods came in at the start of the year, exceeding the $5.219 billion a year ago as well as reversing the steep 25.8-percent year-on-year drop posted last December.

In a statement, the National Economic and Development Authority (Neda) attributed the strong imports growth last January to higher purchases of capital goods, consumer goods, as well as intermediate goods and raw materials.

“This imports growth is the highest level reached since November 2010. Significantly, the value of imported capital goods, a leading indicator for strong economic activity, grew by 80.4 percent in January. This was the highest monthly year-on-year increase of capital goods since September 1996,” Socioeconomic Planning Secretary and Neda Director General Emmanuel F. Esguerra said.

The Neda chief noted that imports of capital goods, which composed over a third of the total last January, had been growing by double-digits  since February last year, save for the month of August.

“This capital goods-driven surge in imports in January is a good indication that investor confidence in the country remains high. The continued increase in capital formation is expected to come from the expansion of public and private construction, along with durable equipment investments,” Esguerra said.

Imports of intermediate goods and raw materials rose 12 percent to $2.5 billion last January due to the robust increase in importation of raw materials, especially manufactured goods as well as materials and accessories for the manufacture of electrical equipment.

“The double-digit growth in imports of semi-processed raw materials, particularly manufactured goods, since the second half of 2015 indicates that there is a growing domestic market. This bodes well for industrial production. Likewise, the higher purchase of materials and accessories for the manufacture of electrical equipment, which is used as an intermediate good for semiconductors, also has a positive effect on electronics exports,” Esguerra explained.

The value of imported consumer goods climbed by 29.3 percent year-on-year to $1 billion on the back of strong demand for both durable and non-durable goods.