APRIL IMPORTS TUMBLE 1.8% TO $4.336B
MANILA, JUNE 27, 2007 (STAR) Philippine imports fell 1.8 percent to $4.336 billion due to a drop in demand for electronic components used in the country’s export industry, the National Statistics Office (NSO) reported yesterday.
Total imports in the first four months of the year, however, were at $16.307 billion, a 3.4 percent increase over the same period in 2006, the NSO said.
The NSO noted that the import of electronic components, which are the country’s single largest import item, fell 17.3 percent in April to $1.846 billion.
Other key imports like cereals, iron and steel, plastics and industrial machinery also suffered double-digit falls in April, the NSO said.
The decline in imports in April caused the country’s trade deficit in that month to hit $219 million, down from a $99-million deficit posted in the same period last year, the government statistics office said.
Analysts, however, said Philippine electronics exports can still expand by a targeted 10 percent in 2007 despite a disappointing performance in April and a drop in imports of parts, an industry group said yesterday.
Electronics make up over 60 percent of total Philippine exports, which has been one of the bright spots of the country’s economy. But electronics exports grew only 1.1 percent year-on-year in April after 7.3 percent expansion in March and imports of parts needed for finished products dropped.
Ernesto Santiago, executive director of the Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI), however said the performance of the electronics industry could be affected by the Easter holidays in April, when the country comes to a standstill for almost an entire week.
“The global environment is conducive for us to grow this year,” Santiago said, adding that exporters are generally optimistic about export revenues in the second quarter.
“There has been inventory pick up, they are preparing for second quarter so second quarter is a bullish quarter,” he said.
Santiago said wireless applications, mobile phone, consumer products like LCDs and high-definition television sets and i-Pod would be the main drivers of growth for the electronics sector this year.
Last year, electronics export grew 11 percent, slightly higher than the industry’s 10 percent projection. SEIPI projects a further 10 percent growth in exports in 2007.
Analysts said the import numbers were worrying because they came despite the strengthening of the peso against the dollar.
“It does not augur well for electronics exports in coming months, given the 17.3 percent plunge in April’s electronics imports in spite of the stronger peso,” said Patricia Lui, managing analyst with Informal Global Markets in Singapore.
The total trade deficit for the first four months of the year amounted to $8 million compared to a $780 million deficit in the same period last year.
Jonathan Ravelas, a market strategist at Banco de Oro Universal Bank, said the lower imports may be a sign of “a further slowdown in exports growth in the next few months, but I consider this as just short-term softness.”
He said that the overall outlook for exports for the whole year remains positive, citing the sector’s decent 8.1 percent growth in the first four months of the year.
The government is aiming for an 11 percent growth in exports and 12 percent increase in imports for the whole year.
The United States remained the country’s biggest source of imports in April with $638.87 million or 14.7 percent of the total. However this was a 21.1 percent drop from the same period last year.
Singapore overtook Japan as the second largest source of imports with $30.8 million or 12.2 percent of the total. This was a 49.6-percent increase over last year.
Japan, at third, sold $494.7 million worth to the Philippines in April, a 17.9 percent drop from a year ago. — AFP
Chief News Editor: Sol Jose Vanzi
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