MANILA – Merchandise imports declined by 10.8 percent in November 2014 as lower payments for capital goods and mineral fuels and lubricants largely negated the growth in the value of imported raw materials and intermediate goods and consumer goods, according to the National Economic and Development Authority (NEDA).

The Philippine Statistics Authority reported that total import payments fell to US$5.0 billion in November 2014 from US$5.6 billion in November 2013. For the same period, the import value of capital goods slumped to US$789.4 million, a sharp 59.0-percent reduction from US$ 1.9 billion.

“The negative performance of capital goods imports was largely due to the decrease in imports of aircraft, ships and boats, which partly reflects the trough period of the massive re-fleeting program of major airlines, as well as to the reduction in the import value of telecommunication equipment and electrical machinery. Declining global oil prices also brought down the value of inward shipments of mineral fuels during the month,” said Economic Planning Secretary and NEDA Director-General Arsenio M. Balisacan.

For the first eleven months of 2014, imports bill grew by 2.8 percent to US$58.5 billion from US$57.0 billion a year ago. With faster growth in exports (10.2%), trade-in-goods deficit for the January to November period narrowed significantly to US$1.5 billion from US$5.2 billion in the same period in 2013.

The higher value of imported raw materials and intermediate goods and consumer goods partially mitigated the overall decline in imports during the month. Total payments for imported raw materials and intermediate goods increased by 49.4 percent to US$2.5 billion in November 2014 from US$1.7 billion in November 2013.

“The prevailing low oil price environment, which is expected to persist until 2015, may further increase the country’s total oil importation for the remaining part of 2014 and for the whole of 2015 given the country’s high dependence on imported oil. Imports of consumer goods will likewise remain positive for the remaining month of the year, mainly supported by the uptick in domestic consumption primarily of food,” the Cabinet official said.

He noted that the global economic environment remains fragile at present, with many developed economies confronted with various economic uncertainties; from deflation, precarious fiscal positions, slowing consumer demand, among others.

“The continuing low prices of oil bode well for the country’s consumer activity, given the relief from hikes in fares, utility costs, and other consumer items. Industrial activity also benefits from the reduction in operating costs. This is also an opportune time to implement programs to encourage backward linkages among domestic industries. Programs that improve productivity through the use of technology and that facilitate access to credit, such as those of the Departments of Trade and Industry and Science and Technology (DTI and DOST),” Balisacan said.

However, Balisacan noted that low oil prices entail reduction in revenues from oil taxes and duties, and may thus cause the government’s fiscal position to worsen should low oil prices persist. He urged policy makers to implement alternative measures such as increasing excise taxes on petroleum products to recover or offset lost revenues from customs duties so as not to compromise development objectives tied to the national budget.

Meanwhile, the People’s Republic of China remained as the country’s top source of merchandise imports in November 2014 with a 16.2 percent share to total imports bill followed by Saudi Arabia (10.0%), United States of America (9.7%), Japan (9.6%), Singapore (8.3%), South Korea (7.8%), Malaysia (6.1%), Thailand (5.5%), Taiwan (4.1%), and Indonesia (3.9%).