MANILA, Philippines - Philippine imports fell for the first time in three months in July on slower electronic shipments, highlighting weak demand from the country’s main trading partners as the global economic slowdown bites.
Electronics, the country’s top import, climbed 4.8 percent in July from a year earlier but were down 16.2 percent from the previous month.
The country posted a trade deficit of $236 million in July, bringing the cumulative deficit in January to July to $4.23 billion, the National Statistics Office (NSO) reported yesterday.
“Although partially deflated by a high base, the poorer-than-expected import growth in July reflected the extent of supply disruption from the storm that hit the Philippines in July. As a result, we think the contraction in import growth is a one-off and import growth should likely increase again in future months,” Jeff Ng, economist at Standard Chartered Bank in Singapore, said.
Japan was the country’s top import source in July, accounting for 11.6 percent of total purchases, followed by China with 10.9 percent, and United States with 10.1 percent.
Imports from Eastern Asia, the top import source by economic bloc accounting for 39.9 percent of total, were up 8.2 percent in July from a year earlier.
Imports from Southeast Asia and the European Union, the second and third top economic blocs, were up 4.3 percent and up 1.7 percent, respectively.
The government has forecast exports would grow 10 percent this year, but it revised down its 2012 imports growth forecast to 12 percent from 15 percent as manufacturers feel the brunt of the global economic slowdown.
The Semiconductors and Electronics Industries in the Philippines Inc cut its export growth forecast this year to five to seven percent from 10 to 15 percent on slowing external demand.
Apart from electronic parts, other top imports in July were mineral fuels, industrial machinery, transport equipment and cereals.
The Philippine central bank, which next meets on Oct. 25 to review policy, has kept its overnight borrowing rate at a record low of 3.75 percent following three cuts totaling 75 basis points this year aimed at shielding the economy against external shocks.
The Philippine economy expanded just 0.2 percent in the second quarter from the first three months of the year -- the weakest in three years – dragged down by a slump in electronics exports and a related drop in industrial output, along with weaker growth in the agriculture and service sectors.
The country’s economic managers remain optimistic economic growth this year will be within the target of five to six percent, accelerating from last year’s 3.7-percent expansion.