RP imports grow by a slower 2.7% to $3.367-B in May

Philippine imports rose by a slower 2.7 percent to $3.367 billion in May from $3.277 billion in the same period last year due to flagging global semiconductor sales, the National Statistics Office (NSO) reported yesterday.

In April, imports rose by 6.5 percent to $3.68 billion while for the first five months, imports were down 0.2 percent to $16.44 billion.

The latest figures showed the country’s trade deficit nearly tripling to $71 million in May from $18 million a year earlier.

For the five months to May, the trade deficit was $398 million, down sharply from $1.06 billion in the same period last year, the government statistics office said.

Philippine imports, a key measure of economic activity since they reflect demand for components used in exports, especially electronics, fell four percent in March and 4.8 percent in February.

Analysts said falling imports suggests exports growth will slow further, making it tougher for President Arroyo to boost overall economic growth to raise the revenue needed to fix the country’s finances.

"There’s a global slowdown and we’re not competitive," said Emma Pante, an economist at Rizal Commercial Banking Corp. "We’re only competitive where our exchange rate is concerned, not in the cost of doing business. In labor alone, we’re more expensive than India or China."

Electronics imports in May were down 1.7 percent year-on-year to $1.39 billion and down 5.8 percent from April’s $1.475 billion.

Global electronic sales growth slowed to 4.1 percent in May from 6.9 percent a month earlier, according to San Jose-California-based Semiconductor Industry Association.

May imports of fuels and lubricants grew 35.6 percent from a year earlier to $494 million.

Other top imports for May were: transport equipment, $128.91 million; cereals and cereal preparations, $114.69 million; iron and steel, $ 108.48 million; and textile, $92.29 million.

The US emerged as the country’s biggest source of imports. However, imports from the US declined by 6.6 percent to $516.61 million in May from $552.85 million in the same period last year.

Japan, the country’s second biggest source of imports for May with a 14.6 percent share, reported shipments worth $491.24 million. Singapore followed with payments worth $274 million. Other major source of imports were: Taiwan, $258.18 million; China, $238 million; and Saudi Arabia, $194 million.

The economy is expected to grow 4.75 percent this year, according to the International Monetary Fund (IMF), and at least 5.3 percent, according to government estimates. Both estimates are slower than last year’s 6.1-percent expansion.

"Five percent is a high scenario," Pante said.