PHILIPPINE imports in February continued to drop by hefty volumes, the government reported on Friday. The National Statistics Office said imports slid 31.9 percent, following January’s contraction of 34.5 percent. In February last year, imports posted a growth of 21.7 percent. It was the fifth straight month since October last year when imports started to decline.
“Total external trade in goods for February 2009 reached $5.565 billion, representing a 35.3-percent decline from $8.603 billion recorded during the same month in 2008. This was due to the 31.9-percent decrease of total imports to $3.059 billion from $4.491 billion in February 2008,” the NSO said.
Month-on-month, the February imports were lower by 6.5 percent.
The import bill for electronic products, which are mainly components for the country’s top export products, dipped 42.9 percent to $1.074 billion.
“Among the major groups of electronic products, components/devices (semiconductors) having the biggest share of 28 percent, decelerated by 43.3 percent to $857.46 million from $1.512 billion in February 2008,” the NSO said.
Exports in February recorded a 39-percent slump to $2.506 billion. Trade deficit rose $552 million from $379 million deficit in the same period last year.
The weakening trade in the global arena reflected the worldwide recession which dampened demand particularly in developed countries.
The top import sources of the Philippines were the US, Japan, Singapore, China, Taiwan, Thailand, South Korea, Vietnam, Malaysia and Indonesia.
Economists said the decline in the country’s imports was expected. “At this juncture, trade numbers don’t look good. It’s a reflection of the
impact of the global recession. It’s not just in the Philippines but everywhere else. The reversal in the prices of oil probably contributed to the decline in imports,” said Song Sen Wun, Regional Economist at CIMB-GK Research in Singapore.
Despite the fall in imports, the NSO said the country’s trade deficit for February rose 31 percent to $552 million.
The US was the main source of the country’s imports in February with a share of $416.50 million or 13.6 percent of the total import bill. The amount was lower by 36.2 percent than the $652.83 million recorded in 2008.
Japan was the second largest source of imports, with $403.25 million, followed by Singapore ($384.98 million), China ($228.19 million), and Taiwan ($192.90).
The government is expecting imports to contract by 12 to 14 percent this year, while exports are seen to decline from 13 to 15 percent, worse than previous estimates of declines of 8 to 10 percent and 6 to 8 percent, respectively. The estimates are based on the balance of payments definition of trade data.
Economists also see weakening trade flows.
“We do think that we are still going to see double-digit declines in trade flows for a while,” said Economist Simon Wong of Standard Chartered in Hong Kong.
“Sentiments may have bottomed, but are still weak by any measure, and that suggests that the recovery will not be an overnight event,” added Vishnu Varathan, Economist of Forecast Pte.
The government has already lowered its growth forecast for the year to 3.1 to 4.1 percent from an earlier estimate of 3.7 to 4.4 percent due to weak exports and after multilateral lenders cut their own forecasts.
It also raised its budget deficit estimate this year to P199.2 billion, or 2.5 percent of gross domestic product from 2.2 percent previously.