PH imports up 11.7% in September

Reuters

Posted at Nov 25 2011 11:36 AM | Updated as of Nov 25 2011 07:58 PM

MANILA - Philippine imports rose 11.7% in September from a year earlier, the fastest growth in five months even as the country's main imports of electronics and semiconductors fell 11.6%. 

The trade deficit in September was $1.24 billion, bringing the deficit for the first nine months of the year to $8.36 billion, official data showed on Friday.  

"The trade deficit in September was wider than we expected. But clearly this means external demand is becoming a bigger drag on headline GDP growth and will likely remain so going into 2012 given the uncertainty in Europe and the down-cycle in the electronics sector. This leaves the onus on the government to really accelerate spending plans to limit the downside on growth," said Euben Paracuelles, economist at Nomura, Singapore.

George Worthington, chief economist Asia-Pacific IFR Markets in Sydney, said the rising deficit, which hit a record $10 billion for the 12 months to September, is bound to exert pressure on the peso. He also does not see a recovery in the electronics imports, considering there is a weak demand in developed markets.

"That means that the trade gap will continue to widen in coming months, adding to the pressure on monetary policy as service exports will only partly compensate.    The BSP could be forced to lift rates to shore up the currency even as the global economy heads for a period of considerably slower growth," Worthington said.