May imports volume expands despite drop in payments

MANILA, Philippines - A 7.1 percent expansion in the volume of total imported merchandise was recorded in May, the National Economic and Development Authority (NEDA) said on Friday.

However, the value of the country's total imports declined by 13.4 percent from $5.1 billion in May 2014 to $4.4 billion in the same period.

“Despite lower payments for merchandise imports, more goods are actually being purchased as business sector sentiment for the quarter remains bullish. This is driven by expected robust demand from consumers, expected uptick in construction–related activities and the higher volume of production from the manufacturing sector,” NEDA Director General Arsenio Balisacan said.

According to the Philippine Statistics Authority, lower purchases of imported raw materials and intermediate goods (-23.3 percent), mineral fuels and lubricants (-24.8 percent), and consumer goods (-3.4 percent) were the main factors in the softening of merchandise imports.

Balisacan added that the volume of imports indicates a likely sustained growth of the domestic economy for the remainder of the quarter.

“The still bullish importation of capital goods should bode well for the country’s productive sectors particularly industry and services. Year-on-year expansion in inward shipments of power generating machines, as well as office, telecommunication and land transportation equipment remains robust,” the NEDA official said.

The NEDA official noted that the government should maintain its support on the micro small and medium enterprises (MSMEs) as it could prompt further growth.

"Continuing improvements in the business environment through various reforms in doing business can sustain the growth momentum. One of these is the recently signed Competition Law that ensures a level playing field even for the MSMEs," Balisacan added.

Balisacan also suggested that the government should improve the quality and quantity of the country's infrastructure as it would further encourage more participation from the private sector.