June imports show signs of recovery

MANILA, Philippines - The country’s import performance began to show signs of recovery in June, posting the lowest annual contraction since October last year and marking the second consecutive month of improvement.

The National Statistics Office (NSO) reported yesterday that imports fell 22.8 percent to $4.108 billion in June, better than the 24.3-percent drop recorded in the previous month.

On a month-on-month basis, June’s import performance was 13.6 percent higher than May, marking the second straight month of improvement.

The country recorded a trade deficit of $702 million in June, 11.7 percent smaller than the shortfall registered in the same period last year, the NSO said.

The National Economic and Development Authority (NEDA) said the month-on-month growth in merchandise imports shows that the sector is starting to recover.

“This is the second month-on-month positive growth of merchandise imports, indicating possible recovery from the trade slump,” NEDA acting director-general Augusto Santos said.

He said that the month-on-month growths in the region also indicate that emerging Asian economies are also on the rebound.

Santos was named NEDA head last Aug. 19 following the resignation of former Socioeconomic Planning Secretary Ralph Recto last Aug. 16.

Imports of electronic components, which accounted for 33.8 percent of June’s total, amounted to $1.389 billion, down 20.3 percent from the same period last year but up 6.8 percent from May.

Components shipped into the country are used in the electronic products that make up about 58 percent of the Philippines’ exports. The rise of such shipments is seen as proof that foreign orders for local electronics are rising.

“The important thing here is the month-to-month figures where we are showing improvement,” said Ron Rodrigo of DBP-Daiwa Securities Inc.

Rodrigo said the recovery in

imports was an indication that there would be “an improvement in exports of finished products in the coming months.”

“The downturn is slowing down and that is good but its very gradual,” observed Luz Lorenzo of ATR Kim Eng Securities.

She warned that this meant external trade would not significantly lift the economy this year and perhaps not even next year.

Japan was the leading source of imports in June, accounting for $486.9 million or 11.9 percent of the total, the statistics office said in a statement.

The United States, China, Taiwan and Singapore were the second to fifth largest importers respectively.

Total imports in the first six months of 2009 amounted to $20.365 billion, down 31.1 percent from the same period in 2008, the office said.

This resulted in a trade deficit of $3.143 billion in the first half of 2009, down 20.2 percent from the same period in 2008. — Iris Gonzales