Imports down 14% in January

MANILA, Philippines - The country’s merchandise imports declined 14 percent in January this year from a year ago amid a contraction in payments for mineral fuels and lubricants, as well as capital and consumer goods.

According to data from the Philippine Statistics Authority, the country’s merchandise imports fell to $5.1 billion in January this year from $6 billion in the same month last year.

The latest result is a reversal of the 0.4-percent year-on-year growth posted in December 2014, and 24.7-percent expansion in January 2014.

The National Economic and Development Authority (NEDA) attributed the lower imports result to the reduced payments for mineral fuels and lubricants, capital goods, and consumer goods in January of this year.

“Lower oil prices primarily caused the imports bill to decline significantly in January 2015. Over the medium term, payments for imported crude oil may remain lower, tempering the total value of Philippine merchandise imports in 2015,” NEDA director general Arsenio Balisacan said.

By country, China remained the biggest source of imports with its 15.4 percent share, followed by Singapore with 9.1 percent, and the US which accounted for nine percent of the total in January.

Given the positive outlook on the domestic economy, imports particularly of raw materials and intermediate goods, capital goods, and consumer items are seen to rise in the coming months.

 “Our prospects for the business sector, including export-oriented industries, remain largely positive, especially in the quarter ahead, as more businesses have expressed their interest to expand operations, especially the manufacturing sector,” Balisacan said.

 “Consumer spending is also likely to remain upbeat, in line with increases in income opportunities as reflected in the January 2015 employment numbers,” he added.

The improving conditions and utilization rates at Manila’s ports are also seen to support the growth of the country’s imports.

Meanwhile, the high levels of oil inventories and moderate global growth projections are seen to affect imports as it may take time for crude oil prices to pick up and return to the more than $100 per barrel annual average price in 2011 to 2013.

To offset the reduction in government customs revenue from lower oil prices, Balisacan said there may be a need to increase the excise taxes on petroleum products.