With the May imports bill registering the highest growth in 22 years, the National Economic and Development Authority (Neda) said it expects investment and consumption to drive economic growth this year.
Data from the Philippine Statistics Authority (PSA) showed imports grew 39.3 percent in May, the highest since the 39.45 percent posted in January 1994.
The country’s import receipts rose to $6.736 billion in May, from $4.834 billion a year ago.
“The bullish performance of imports is a clear signal that our domestic economic conditions remain robust, despite the weak global economy,” Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement.
“With its current upward trend, we expect investments and consumption to drive growth for the rest of the year,” Pernia added.
Pernia, who is also Neda director general, said the hike in the May imports bill was mainly due to the increase in payments for imported transport equipment.
PSA data showed transport equipment accounted for 10.4 percent of the total import bill, and was the country’s second top import for the month and the biggest gainer among the imported commodities.
Imports of transport equipment reached $703.61 million in May 2016, more than double last year’s value of $337.30 million.
Pernia also noted that payments for consumer goods rose by 47.2 percent to $1.2 billion in May.
He attributed this to higher spending on both durable goods and nondurable goods at 92.4 percent and 15 percent, respectively. The increase was driven by the higher demand for passenger cars and motorized cycles during the period.
“This is consistent with the findings of AmBisyon Natin 2040, which listed car ownership as among the aspirations of the Filipino people. But infrastructure, especially roads, must keep up,” Pernia said.
“At the same time, public-transport systems must be improved to expand people’s transport options, while we foster economic development in the countryside. Since these strategies take time to implement, we need everyone’s full cooperation toward efficient traffic management and strict enforcement of regulations,” he added.
The Neda chief added that on the upside, the high domestic demand for vehicles can be a source of growth if firms located in the country can participate in the manufacture of the parts and components or even a complete car model.
Among 11 selected Asian countries, only the Philippines posted a double-digit growth of 39.3 percent in imports bill; others saw a decline in their purchases in May.
This is the third consecutive month that the country’s import receipts posted a double-digit increase, and the fourth time that it posted such growth in the January-to-May period.
The expansion of imports bill and the slide in exports during the period caused the country’s balance of trade in goods (BOT-G) to widen in May.
The country’s trade deficit in May reached $2.021 billion. It marked the third time the country’s trade deficit breached the $2-billion mark in 2016.
In the January-to-May period, the country’s cumulative BOT-G also posted a wider deficit at $9.816 billion. This is the highest five-month average since 2014.
Meanwhile, aggregate payments from the country’s top 10 imports sources for May reached $5.422 billion, or 80.5 percent of the total import bill.
The country’s top 3 sources of imports were China, which accounted for 20.4 percent of the total; Japan, with 10.5 percent; and the United States, with a share of 8.5 percent.
Imports from China amounted to $1.373 billion, an increase of 65.7 percent from $828.66 million in May 2015. The country has a trade deficit with China worth $879.87 million.
Shipments from Japan reached $709.57 million in May, more than double the $318.64 million worth of purchases made last year.
The country’s import receipts from the US reached $573.10 million. This represented an increase of 7.8 percent, from $531.42 million in May 2015.
The Philippines has a trade surplus of $325.01 million with Japan, and $136.30 million with the US.