AS the country’s import growth continues to slide, the National Economic and Development Authority (Neda) believes the pickup of Philippine imports will depend on how fast Japan recovers from the March earthquake and tsunami.
Neda Director General Cayetano Paderanga Jr. said the government is hopeful that when the Japanese economy recovers, the country’s imports and exports will follow suit.
Paderanga, who is also the socioeconomic planning secretary, said the slower-than-expected growth in imports—as well as exports—was largely due to the disruption of the global supply chain, particularly in the manufacture of electronics and automobiles caused by the twin tragedies in Japan in the first quarter of the year.
“We hope [imports will recover] over the second half of the year. The announcements that we get from the Japanese side were that they are recovering faster than expected. But how much faster, we haven’t had the quantitative numbers yet,” Paderanga said in a briefing with reporters on Thursday.
The National Statistics Office (NSO) said the country’s total merchandise imports increased 6.6 percent in June to $4.503 billion from $4.225 billion in 2010. On a month-on-month basis, however, imports declined 7.9 percent from $4.888 billion recorded in May.
The NSO said total imports for the January-to-June period grew 15.6 percent to $30.501 billion from $26.377 billion
last year. However, this is still below the import growth target of 17 percent to 18 percent this year.
The slowdown in import growth was largely due to the 20.7-percent decline in the import bill for electronic products. This has been the country’s main import and export commodity, which accounted for 25.5 percent of the total import bill in June.
Payments for electronic product imports in June amounted to $1.147 billion, lower than last year’s figure of $1.447 billion. On a monthly basis, it went down by 32.5 percent from $1.7 billion in May.
Former Budget Secretary Benjamin Diokno said this sharp decline in the import of electronic products is a “leading indicator” that the country’s exports in the months ahead will continue to be slow.
The country’s exports are largely import-based. In the June import data, import payments for capital goods, or goods that are used for exports, only accounted for 24 percent of total imports. This was a contraction of 16.9 percent to $1.082 billion from $1.302 billion in June 2010.
“Imports grew by 6.6 percent, but compared to the revised imports growth target of 17 percent to 18 percent this year, this suggests a slowdown,” Diokno said.
“With a grimmer world economic outlook for the second half of the 2011, and perhaps until mid-2013, I don’t see a rebound of both imports and manufacturing output in the near term,” he added.
With the import of transport equipment contracting by 17.8 percent, Diokno said the disruption in the supply chain caused by Japan’s tragedy would persist.
The NSO said transport equipment, which accounted for 4.7 percent to the total import bill, was the country’s fourth top import for the month. Payments for this import amounted to $213.22 million, lower than last year’s $259.50 million.
However, he said one piece of good news is the 13-percent contraction in the import of cereals and cereal preparations, which includes rice.
“The decline in cereals import is not necessarily a bad thing. It means the over-importation in the past has been addressed,” Diokno said.
The Philippines top three import sources for June are China, the United States and Japan.
Imports from China, which accounted for 10.4 percent of the total import bill, grew 31.6 percent to $470.44 million in June from $357.58 million a year ago.
Imports from the US, accounting for 10.2 percent of the total, rose 8.1 percent to $458.59 million, while imports from Japan dropped 22.7 percent to $416.90 million.
