The Philippines imported more petroleum, wheat and tobacco products amid the second straight monthly slowdown in imports in November 2011, according to the National Economic and Development Authority (Neda).
Neda said in a statement that there were year-on-year increases in the imports of mineral fuels and lubricants (30.4 percent to $1.1 billion), and unprocessed raw materials (15.8 percent $206.4 million) in November 2011.
The surge in petroleum imports was due to greater volume of inward shipments of coal and the higher oil prices in the international market, while the increase in the payments for unprocessed raw materials was traced to higher imports of wheat (24 percent), inedible crude materials (14 percent), and tobacco (32.8 percent).
Industry sources attributed higher wheat imports to a lack of local alternatives. Wheat imports in November were mostly feed wheat for livestock since there was short supply of corn, the main ingredient for animal feeds. Milling wheat imports were said to be flat.
Demand and supply constraints
Trade in November 2011 was broadly affected by both demand and supply constraints, Neda said. The National Statistics Office earlier reported that import payments posted a year-on-year increase of 0.6 percent to $5 billion in November 2011. It was the second straight slowdown in imports since October, when growth was at 2.3 percent from 11.7 percent in September.
“The slowdown in import growth was mainly due to the lower inward shipments of raw materials for electronic manufactures, weak domestic demand for durable equipment and lower automobile imports caused by the disruption in the production chain following the flooding in Thailand,” said Socioeconomic Planning Secretary Cayetano W. Paderanga Jr.
Also, lower payments for capital goods (-13.8 percent), semi-processed raw materials (-1.6 percent), and consumer goods (-1.7 percent) contributed to the slower overall growth of merchandise imports during the month.
“Imported electrical equipment serve as inputs for the production of exported electronic products, which account for more than 50 percent of the country’s total merchandise exports,” Paderanga said.
Contraction in electronics
The NSO earlier reported that electronic exports contracted by 34.4 percent in November 2011.
“Within the context of the weak global environment, the decline of capital goods imports may be explained by consumers’ and firms’ tendency to postpone consumption of investment and durable goods during periods of demand shock due to income constraints,” said Paderanga, who is also Neda director-general.
Consumer goods contracted by 1.7 percent year-on-year to $592.3 million as the gains from higher payments for non-durable goods (9 percent) were countered by the decline in imports of durable goods (-11.2 percent) on account of lower imports of passenger cars and motorized cycle (-24.4 percent).
Citing a report from the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi), Paderanga said that most local automobile dealers import both units and parts from Thailand, which is considered the automotive hub in the East Asian region.
“However, according to the World Bank, the recovery of production to the pre-crisis level will continue to be affected by the conditions of the global demand for cars and electronics, despite reconstruction efforts to restore order in the supply chain,” Paderanga added.
Fewer cars
Campi reported that local sales of motor vehicles contracted by 10.6 percent from 13,523 units in November 2010 to 12,090 units in November 2011.
For the major supplier of imports to the country, Japan continued to be the top source, comprising 12.7 percent of the total value of merchandise imports in November 2011. Inward shipments from Japan totaled $631.6 million, composed mainly of capital and manufactured goods, Neda said.
China was the second major source of imports with an 11 percent share followed by the US (10.9 percent), Singapore (6.9 percent), and Saudi Arabia (6.5 percent).
Meanwhile, total import payments from January to November 2011 amounted to $55.5 billion, which is 11 percent higher than the value of merchandise imports in the same period a year ago. Also, the trade-in-goods deficit from January to November 2011 increased to US$10.9 billion from $2.7 billion a year ago, Neda said.