Double-digit import growth to continue until year-end–Neda

DESPITE the slowdown in main export markets like the United States and Japan, the National Economic and Development Authority (Neda) is confident that hitting double-digit import growth will continue for the rest of the year.

In a statement, Socioeconomic Planning Secretary Dr. Cayetano Paderanga Jr., who is also Neda director general, said the positive outlook for economies in the Asian region in the second half of 2010 will work toward the country’s advantage.

“For the second half of 2010, we hope that imports would continue to grow as a result of a steadfast outlook of growth in the Asian region. This would also serve as a good support whenever export demand slows down from the countries like Japan and the United States,” Paderanga said.

The Socioeconomic Planning secretary said strong imports growth is also bound to continue on the back of seasonality in terms of export growth.

Paderanga said the increase in demand for exports at this time would also augur well for the country’s imports growth.

The country’s main export, electronic products, are heavily dependent on imported materials. In August exports of electronic products accounted for as much as 63 percent of total exports with $2.989 billion.

“The strong imports in this period is traditionally associated with a startup in demand for semiconductor products as electronic manufacturers begin their holiday season buildup,” Paderanga said.

Imports for August 2010 increased by 22 percent and amounted to $4.4 billion. The Neda said the country’s Asian neighbors posted double-digit growth of imports in August 2010.

Top performers in the East and Southeast Asian region for the month were China with a growth of 35.2 percent; Thailand, 33.9 percent; South Korea, 28.6 percent; and Hong Kong, 28.6 percent.

Imports of raw materials and intermediate goods went up by 36.5 percent in August and buoyed total imports payments for the month. It was supported by consumer goods that posted a growth of 38.5 percent, capital goods at 8.6 percent and mineral fuels and lubricant at 0.7 percent.

Further, Paderanga noted that imports of rice increased by 272.7 percent in value and by 160.7 percent in volume year-on-year.

The Neda said the National Food Authority would import 2.47 million metric tons of rice for 2010 to offset the shortfall in domestic production brought about by typhoons in late 2009, and El Niño and La Niña this year.

“Consumer goods largely increased, buoyed by rice imports that quadrupled in value for this period. In terms of volume, rice imports more than doubled to 127 million gross kilos compared to last year,” Paderanga added.

In terms of total imports, Japan remained the country’s largest imports source with a 13.6 percent share and higher by 32.0 percent to $600.5 million. The country’s top import origins were the United States which posted a growth of 10.4 percent; Singapore, 10 percent; China, 8.4 percent; and Thailand, 8.2 percent.

The growth of imports from Japan was supported by higher shipments of capital goods which posted a 14.5 percent increase and raw materials with 34.1 percent which serve as major inputs in domestic industrial operations.

“However, the gains in the dollar value of raw materials shipped from Japan may be traced mainly to upticks in prices as volume of imported raw inputs from Japan dropped by 23.9 percent year-on-year,” said Paderanga. –Cai U. Ordinario / Reporter, Businessmirror