MANILA – Strong domestic demand for raw materials and intermediate inputs, capital and consumer goods kept Philippine merchandise imports in October 2015 in the positive territory for the fifth consecutive month, according to the National Economic and Development Authority.
Trade data released by the Philippine Statistics Authority today indicate a 16.8-percent increase in spending on imported goods, or US$6.5 billion in October 2015 from US$5.6 billion in the same month last year. This is also a significant upsurge from the 8.2-percent growth recorded in the previous month.
The double-digit growth was backed significantly by higher importation of raw materials and intermediate goods (40.1%), capital goods (25.4%) and consumer goods (4.1%). The Philippines outpaced its Asian peers as other trade-oriented economies registered declines in imports. Vietnam, which posted positive growth in the previous months along with the Philippines, was marginally down by 1.8 percent in October this year.
“The continuing resurgence of imports is a healthy indication of robust investment demand as it continues to be driven by intermediate and capital goods. The anticipated recovery of the global economy, and brisk election spending will continue to drive imports to double-digit growth,” said Economic Planning Secretary Arsenio M. Balisacan.
Import payments for raw materials and intermediate goods, which account for 42.8 percent of the country’s total merchandise imports, increased by US$2.8 billion in October 2015.
The value of imported capital goods, which account for 32.3 percent of total merchandise imports, increased to US$2.1 billion in October this year. Imports of capital goods have been expanding at double-digit rates since March 2015, which bodes well for overall investments growth in 2015.
“Increasing appetite for capital goods and manufactured goods, such as materials accounting for the manufacture of electrical equipment, signifies an upbeat business sector. This demonstrates the overall business confidence growth of 51.3 percent recorded in the fourth quarter this year from 41.4 percent in the previous quarter, as reported by the Bangko Sentral ng Pilipinas. This is the highest we had in the last two years,” said Balisacan who is also the NEDA Director- General.
Moreover, import bill for consumer goods increased by 4.1 percent to US$1.1 billion in October 2015, while total import payments for mineral fuels and lubricants declined by 38.5 percent to US$524.8 million in October 2015, mostly by the volume purchases and price decline of petroleum crude.
“On the back of a weak global environment, the strong growth in shipments of capital goods and consumer goods points to a resilient domestic economy. Supportive policies for a thriving business sector should be continued. These include lowering the cost of and reducing the time for starting a business, reducing red tape and transaction costs, and supporting innovation and technological improvements, among others,” Balisacan said.