MANILA – Merchandise imports grew by 2.4 percent for full-year 2014 despite the 10.6 percent drop in December 2014 due to significant decreases in the value of imported mineral fuels and lubricants, capital goods, and consumer goods, according to the National Economic and Development Authority (NEDA).

The Philippine Statistics Authority reported that total payments for merchandise imports amounted to US$4.9 billion in December 2014, down by 10.6 percent from US$5.4 billion in December 2013. However, for the full-year 2014, the value of merchandise imports grew by 2.4 percent from US$62.4 billion in 2013 to US$63.9 billion.

“The full-year growth of the country’s merchandise imports relative to our strongly performing merchandise exports reduced trade-in-goods deficit in 2014 to US$2.1 billion from US$5.7 billion in 2013. This by far is the narrowest trade gap recorded since 2001,” said Economic Planning Secretary and NEDA Director-General Arsenio M. Balisacan.

The Cabinet official noted that the tepid growth of imports for December 2014 was generally pulled down by the plunging oil prices, a trend which was more conspicuous during the last three months of 2014.

“Over the immediate term, the combination of strong world crude oil supply growth and weak global demand is expected to reduce imports via lower oil prices and possibly weaker demand for the country’s exports, thus tempering imports,” he said.

Balisacan added that port congestion appears to remain a significant risk for both exports and imports growth. He said that the lingering effects may have been felt by the sector towards the end of the year as both value and volume of major commodity imports (as well as exports) declined or slowed down notwitstanding the holiday season.

“A more lasting solution to the port congestion and other transportation/logistics issues need to be in place, specifically in Metro Manila where approximately 25 percent of all imports passes through. Transportation constraints could further lead to unnecessary escalation of commodity prices,” he said.

The higher value of imported raw materials and intermediate goods partially tempered the overall decline in imports during the month. Total payments for inward shipments of raw materials and intermediate goods reached US$2.4 billion in December 2014, higher by 12.7 percent as opposed to US$2.1 billion in December 2013.

“What could sustain imports are domestic consumption and investment. Given these, the manufacturing sector will likely continue its growth momentum, thus, keeping imports of raw materials and intermediate goods brisk. Also, stable prices, availability of jobs and more vigorous business activity are seen to further increase consumption spending that could support a healthier demand for imports of consumer products,” Balisacan concluded.

Meanwhile, the People’s Republic of China remained as the main supplier of imported goods accounting for 13.7 percent share to the total value of inward shipments in December 2014 followed by United States of America (9.8%), Germany (8.4%), Singapore (8.3%), Japan (7.9%), Taiwan (7.1%), South Korea (6.9%), Saudi Arabia (5.7%), Malaysia (5.5%), and Thailand (4.7%).