GROWTH in merchandise imports stayed at 6.6% in July due to rising crude oil prices, which offset a nearly 30% decline in inbound shipments of electronics, a key export component.
Industry officials and analysts said this was an indication that imports were trailing exports, which went down in July.
Inbound fuel shipments jumped by 82.6%, data from the National Statistics Office (NSO) showed.
The NSO pegged July’s import bill at $5 billion, 11% higher than the $4.50 billion recorded in June. With exports at $4.43 billion, the trade deficit settled at $570 million for the month, bringing the January to July gap to $6.31 billion.
Imports of electronics products, meanwhile, dropped by 28.6% to $1.17 billion — the biggest decline since September last year. Fuel and electronics, the two biggest import categories, each accounted for a quarter of the import bill.
“Exports are also going down simultaneously with imports. If imports drop, after one to two months, exports would follow. It is not surprising now that as exports drop, imports also drop,” said Sergio R. Ortiz-Luis, Jr., president of the Philippine Exporters Confederation, Inc.
Exports went down for the third straight month in July as outbound shipments of electronics plummeted.
“The double-digit decline [in electronic imports] signifies that the problem is not just because of the weak market. It is also structural. For example, major manufacturers of mobile devices used to import components from us, but not anymore. They now import from other countries. And with this sharp decline, exporters would be contented if they would achieve flat growth by the year end,” University of the Philippines economist Benjamin E. Diokno claimed.
He noted that there was practically no demand from abroad.
“[A]s early as now, you could see that since we receive no orders from abroad, which should be done months ahead of December, there would be no dramatic improvement,” he said.
Fuel imports have been keeping the import bill up, with Dubai crude oil averaging at $110.26 per barrel in July from $72.50/bbl last year. Inward shipments of mineral fuels and lubricants went up to $1.31 billion in July from $719 million 12 months earlier.
Gainers also included non-ferrous metal, up by 82.9%; telecommunication equipment and electrical machinery, 27.1%; organic and inorganic chemicals, 23.1%; and plastics, 22.5%.
Iron and steel imports went down by 9.4% in July, the NSO said.
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By: Trishia P. Octaviano
Source: Business World, Sept. 27, 2011
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