Imports surge 15% to $4.886B in Aug

Import growth accelerated in August as companies such as Texas Instruments Inc. and Toshiba Corp. took advantage of gains in the peso to buy more computer parts abroad.

Imports rose 15.3 percent to $4.886 billion in August from $4.238 billion a year ago, the National Statistics Office reported yesterday. The trade deficit for the month widened to $621 million from a revised $445 million a month earlier.

Higher imports "show the underlying strength of electronic exports and that’s an encouraging sign," said Mayank Mehta, an economist at Action Economics in Singapore. "The import growth figure suggests that economic momentum will continue," Mehta said.

National Economic Development Authority (NEDA) director for planning and policy Dennis Arroyo said the upsurge in inward shipment for electronics contributed to the double-digit growth in imports.

The government aims to boost the economy by 5.5 percent this year from five percent in 2005 by doubling export growth to10 percent. Profit may be buoyed at companies including Integrated Microelectronics Inc. as gains in the peso make purchases abroad cheaper when converted to the local currency, while boosting the value of exports.

Sales abroad in August rose at their fastest pace in five months as the peso strengthened and manufacturers increased shipments of computer disk drives and cell phone chips. The eight-month trade shortfall narrowed to $2.9 billion from $4.25 billion a year earlier.

For August alone, Arroyo said electronic imports rose 12 percent from a month earlier. He noted the upsurge was due in part to the 16.7 percent improvement in the country’s demand for semi-conductor products.

"There’s a significant link" between the stronger peso and higher imports, said Mehta. The peso has climbed 3.5 percent against the dollar in the past three months.

The stronger peso "lowers the cost of energy" as oil, along with other material costs, are paid for in dollars," Art Tan, chief executive officer of Integrated Microelectronics and president of the Semiconductor and Electronics Industries in the Philippines said earlier.

The Philippines imports almost all of its crude oil, the price of which averaged $73.14 a barrel in August from $74.41 a month earlier.

The NSO said imports for the first eight months of the year amounted to $33.9 billion, a 10.2 percent increase from $30.737 billion a year ago. Exports, on the other hand, rose by 16.9 percent to $30.958 billion from $26.487 billion last year.

Arroyo likewise cited the 6.5 percent improvement in capital goods as a significant contributor in the increased merchandise import. The main drivers of capital goods growth are telecommunications equipment and office machines imports, both of which posted a 7.2 percent growth.

Imports of raw materials and intermediate goods likewise went up by 15 percent, buoyed by demand for manufactured goods.

Meanwhile, higher world prices pushed imports of mineral fuels, lubricants and related materials to a 42 percent increase.

The US remained the top source of imports with 15.3 percent share or shipments worth $744.7 million in August. The US was closely followed by Japan and Saudi Arabia with a 12.1 percent or $592 million and 9.3 percent or $450.3 million share of the total import bill, respectively.