Import growth slows on weak demand

Philippine imports rose by 2.3 percent in October from the same month last year, the weakest growth rate since May, as imports of key electronic items, which made up about a fourth of the import bill in October, declined by 19.9 percent. PHOTOS FROM SMAPPLIANCE.COM

Philippine imports in October rose 2.3 percent from that of a year ago, the weakest growth rate since May, as imports of key electronic items fell by a fifth, government data showed.

The National Statistics Office (NSO) said that in October imports reached $5.019 billion from the $4.904 billion posted in the same month last year. However, there was a month-on-month drop by 1.1 percent from the $5.076 billion seen in September 2011.

Also, total trade in October 2011 stood at $9.107 billion—a 6-percent drop from the $9.693 billion posted in the same month last year.

Balance of trade in goods registered a deficit of $932 million, higher than last year’s deficit of $116.00 million. This brought the 10-month deficit to $9.23 billion, the NSO reported.

“Overall growth of imports is down because of the slower economy. Philippine exports are import-dependent. This is especially true for electronics exports,” Benjamin E. Diokno of the UP School of Economics said in a text message.

Cid L. Terosa of the University of Asia and the Pacific said weak domestic and global demand had dampened factory output and this resulted in “weak importation of production inputs and even finished products.”

Factory output in October plunged 6.3 percent—the biggest drop seen in 2011, NSO data showed.

Electronics, which made up about a fourth of the import bill in October, declined by 19.9 percent to $1.235 billion from the $1.542 billion reported in the same month last year.

Semiconductors, which formed the bulk of electronics imports, also contracted by 27.4 percent to $885.55 million in October from $1.22 billion last year.

According to Gilberto M. Llanto of the Philippine Institute for Development Studies, the slow growth is not so worrisome in the context of global economic sluggishness, and there could still be a trade uptick in the fourth quarter due to seasonally higher consumption.

As in past months, Japan was the top source of imports for the Philippines in October, accounting for $606.42 million worth of goods—an increase of 0.8 percent from the $601.36 million seen in the same month last year.

Philippine exports to Japan in October reached $827.75 million, yielding a two-way trade value of $1.434 billion and a trade surplus for the Philippines at $221.33 million.

The Philippines also registered surpluses in trade with the United States and China, which rounded out the country’s top three import sources.—With a report from Reuters