MANILA - Philippine imports in May climbed 10.1 percent from a year earlier, the highest since September, but doubts remain the growth could be sustained for the rest of the year on worries over a prolonged downturn in
The Southeast Asian country posted a trade deficit of $454 million in May, bringing the five-month trade deficit to $3.22 billion, the statistics office said on Wednesday.
"I was expecting a small trade surplus because oil prices have been on a decline, so that would have brought down import growth. But it came out at 10 percent so I think everything is being offset by increases in the other type of imports, maybe consumers and capital goods, which to me would suggest that domestic demand is really bouyant," Euben Paracuelles, economist at Nomura in Singapore, said.
He added there is no need for the Bangko Sentral ng Pilipinas to cut rates at this point.
"For the exports outlook, things are still not looking that great, so external demand is fairly weak if you go by some of the data you have seen out from the U.S. and some regional numbers. So exports will remain on the soft side. But this data is more about what it says about domestic demand which is what really is holding up the economy in the first quarter. That being sustained would mean there is no need for policy support," Paracuelles added.
The United States was the country's top import source in May, accounting for 12.1 percent of total purchases, followed by China with 11.1 percent, and South Korea with 10.5 percent.
Imports from Eastern Asia, the top import source by economic bloc accounting for 41.8 percent of total, were up 24.6 percent in May from a year earlier. Imports from Southeast Asia and the European Union, the second and third top economic blocs, were up 3.8 percent and down 8 percent, respectively.
The government has forecast exports would grow 10 percent this year, but it has revised down its 2012 imports forecast to 12 percent from 15 percent as manufacturers feel the brunt of the global economic slowdown.
The industry group Semiconductors and Electronics Industries in the Philippines Inc cut its export growth forecast this year to 5-7 percent from 10-15 percent on slowing external demand, although the group is hopeful of a rebound in orders in the second half after current inventory cuts stabilize.
Apart from electronic parts and fuel, other top imports are cereals such as rice, electrical and industrial machinery, transport equipment, iron, steel and metal scraps.