MANILA – Despite the 12.8-percent year-on-year decline in total merchandise imports in April 2015, domestic demand for capital and consumer goods remains strong, according to the National Economic and Development Authority (NEDA).
The Philippine Statistics Authority’s latest report indicates that merchandise imports significantly decreased to US$4.7 billion in April 2015 from US$5.4 billion in April last year.
The sharp decline in imported mineral fuels and lubricants (-53.9%), and raw materials and intermediate goods (12.8%) in April 2015 caused the significant overall decrease in imports. However, double-digit increases were recorded in the importation of consumer (30.3 %) and capital goods (13.0%).
“Figures on capital and consumer goods reflect the upbeat outlook of consumer spending and is a positive indication of healthy demand-driven activities at the household and industry level,” said Economic Planning Secretary Arsenio M. Balisacan.
Consumer goods expanded mainly on the back of robust growth in both durable goods (17.1%) and non-durable goods (43.4%). Increased purchases of passenger cars & motorized cycles (15.9%), miscellaneous manufactures (18.7%) and home appliances (17.1%) supported growth in imported durable goods.
As for non-durable goods, significant growth in the importation of rice (1,655.5%), other food & live animals (25.7%) and fruits & vegetables (53.5%) was seen.
“The higher import volume of rice recorded as part of consumer goods reflects government’s effort to maintain a sufficient buffer stock of rice ahead of the lean harvest season,” the Cabinet official said.
The National Food Authority approved the shipment of 500,000 metric tons of rice from Vietnam and Thailand, which started to arrive in March 2015. For April, the share of rice purchases from these countries represented about 70.6 percent and 29.0 percent of the country’s total imports of rice.
In terms of country sources, reduced value of imports from the People’s Republic of China, Japan and Taiwan largely contributed to the overall decline in imports during the period.
Almost all of the East and Southeast Asian region recorded a drop in merchandise imports in April 2015, except for Vietnam.
“Given an uncertain external environment, it is crucial for the government to ensure that the growth momentum is sustained. While the healthy importation of capital goods and consumer durables shows that the country is still on track towards a relatively strong economic expansion, a catch-up in government spending could still further boost domestic demand,” he said.
Balisacan added that the El Niño phenomenon, albeit weak, brings risks and the immediate effect will be felt in the agriculture and industrial sectors.
“The government could also fast track programs to counter the effects of extreme weather condition especially on the agricultural and industrial sectors, which are vulnerable to such in the Philippines,” he said.