February import growth slows 27% to $3.9 billion

MANILA, Philippines – The country’s imports climbed 27.6 percent in February from a year earlier, slowing from January’s seven-year high growth of 31 percent, mainly due to lower purchases of oil and oil products, the National Statistics Office (NSO) reported yesterday.

Data from the NSO showed the country’s total import bill rose to $3.903 billion in February from $3.059 billion in the same month last year. However, compared to January’s imports of $4.287 billion, last month’s imports fell by nine percent.

For the first two months of 2010, total merchandise imports amounted to $8.2 billion, 29.4 percent higher than in the same period in 2009. This brings cumulative trade deficit to $1 billion, $268 million higher compared to last year’s figure.

Purchases of mineral fuels, lubricants and related materials were up 11.1 percent year-on-year to $538.23 million, but the growth was much slower than the 96.2 percent recorded in January.

“The increase in imports of petroleum crude was partly caused by price effects as Dubai oil price went up by 72.8 percent to an average of $74.47 per barrel in February 2010,” the National Economic Development Authority (NEDA) said.

Purchases of the country’s main import item, electronics, surged 33.8 percent to $1.43 billion in February from a year ago against a 2.2 percent rise in January. Electronics accounted for 36.7 percent of the aggregate import bill.

The surge in electronics shipments bodes well for exports in coming months as these products are reassembled for shipment later.

“We would expect that the exports sector will be rendered better off,” said Vishnu Varathan, economist at Forecastweb in Singapore.

“However, cost-side pressures are on the rise and that suggests that unequivocal improvement in the trade account is not a given.

Chances are that the dip in imports will not last too long given previous inventory draw-down, higher prices and the need to replenish stocks as commodity prices rise,” he added.

The Philippines had a trade deficit of $333 million in February, from a revised deficit of $708 million for January, the government said.

Japan remained the country’s largest source of imports with a 13.4 percent share of the total, recording payments worth $522.08 million. This was a 28.2 percent rise from the February 2009 level of $407.40 million.

The United States came in second with $434.26 million or an 11.1 percent share of the import bill, followed by Singapore ($341.91 million), Thailand ($316.63 million), and China ($310.59 million).

The Philippines expects merchandise imports to climb 13 percent to 15 percent in 2010 to reverse a 24.2 percent drop in 2009. It estimates exports to grow seven percent to nine percent after a 21.9 percent drop last year.

Telecommunication equipment and electrical machinery, raw materials for electronic manufactures, and office and electronic data processing machines made up 43.1 percent of the import payments to the top five import sources in February 2010.

The value of inward cargos from the rest of ASEAN covered 28.9 percent of the total merchandise import bill in February.

“Trade-oriented economies in East and Southeast Asia also continued to post strong growth of merchandise imports in February 2010 with Thailand (61.4 percent) and Indonesia (59.6 percent) leading the region,” NEDA said.–Rica D. Delfinado (The Philippine Star) with a report from Reuters