Continued demand for capital and consumer goods drove imports growth of 11.7 percent in March 2016, according to the National Economic and Development Authority (NEDA).The Philippine Statistics Authority reported that imports reached US$6.4 billion from US$5.7 billion in the same period. This is on account of higher purchases of capital goods at 24.1 percent and consumer goods at 39.4 percent.
"The continued strength of merchandise imports and the fact that it is fueled by spending on capital goods bodes well for the economy. This growth also mirrors the positive prospects of the economy that are expected to be sustained for the rest of the year," said Socioeconomic Planning Secretary Emmanuel F. Esguerra.
Additionally, among 11 selected Asian countries, only the Philippines posted positive growth of imports in March 2016. South Korea, Malaysia and Taiwan showed the steepest declines.
"Given the general sluggishness of import activities in the region, government support for higher spending on infrastructure is critical not only because it supports domestic demand but more importantly, because it increases the country's attractiveness to investors," the Cabinet official said.
Imports for capital goods continued on its double-digit growth path for the seventh consecutive month by reaching US$2.1 billion in March 2016.This bodes well for robust economic activity.
Similarly, imports of consumer goods increased to US$ 1.2 billion in March 2016 due to higher spending on both durable goods (67.9%) and non-durable goods (15.6%) during the period.
"Expected to fuel imports growth in the near term will be the continued expansion of public and private construction, along with investments in durable equipment. Meanwhile, increased employment opportunities with increased government spending for personnel services and maintenance and operating expenditures will contribute to the growth of consumer goods imports," said Esguerra, who is also NEDA Director-General.
However, purchases of raw materials and intermediate goods as well as mineral fuels and lubricants declined during the period owing to the waning demand for wheat, inedible crude materials, and lower import payments for other mineral fuels and lubricants, and petroleum.
"The government needs to stay on course towards improving the climate for doing business in the country. This will improve our attractiveness to both local and foreign investors. The passage of the Customs Modernization Act is a step in this direction, as it will reduce opportunities for corruption and technical smuggling," said Esguerra.
In terms of market source, imported goods from Thailand rose significantly by 84.2 percent, overtaking China (45.3%) and Japan (48.9%), and replacing the United States as one of the top three import source since August 2014.
Source: The Philippine Information Agency