June imports growth at 10-mth high

Reuters

Posted at Aug 28 2012 09:38 AM | Updated as of Aug 28 2012 07:04 PM

MANILA - Philippine imports in June rose 13.3 percent from a year earlier, the fastest since August last year helped by a rebound in electronics shipments and delivery of Boeing jets ordered by the country's flag carrier Philippine Airlines

Electronics imports registered its first gain in 13 months, climbing 27.1 percent year on year.

The Southeast Asian country posted a trade deficit of $787 million in June, bringing the six-month trade deficit to $4.0 billion, the statistics office said on Tuesday.
   
"Apart from Japan-induced base-effects that propped the headline modestly, sharp jump in capital goods and higher consumer goods imports are the primary drivers of the strong year-on-year number. Peso gains and pullback in the global crude prices mellowed the fuel import bill. Outlook for the trade sector is not without risks as most of the key trading partners face growth headwinds - Japan's external sector in particular has been running out of steam since Q2," Radhika Rao, economist at Forecast Pte in Singapore, said.

"Private industry players have also lowered the revenue outlook for the semiconductor sector and could weigh on Philippine exports in the coming months. Strong peso is also another additional burden."     
   
The United States was the country's top import source in June, accounting for 15.7 percent of total purchases, followed by Japan with 11.9 percent, and China with 10.7 percent.

Imports from Eastern Asia, the top import source by economic bloc accounting for 38.2 percent of total, were up 25.4 percent in June from a year earlier. Imports from Southeast Asia and the European Union, the second and third top economic blocs,
were up 16.6 percent and up 29 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 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.
 
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.

The Philippine central bank, which next meets on September 13 to review policy, cut its overnight borrowing rate by a combined 75 basis points in January, March and July to a new low of 3.75 percent to fortify the country's economic buffers.

Philippine economic growth likely lost momentum in the second quarter from the previous three months, according to a Reuters poll, dragged by weak farm output and a slump in electronics exports as global demand slackened.

The country's economic managers believe this year's economic growth target of 5 to 6 percent remains achievable. Growth last year was 3.7 percent, below the government's forecast.  (Reporting by Erik dela Cruz and Karen Lema; Editing by Rosemarie Francisco)