December imports growth fastest in 16 months
MANILA (UPDATE) - Philippine imports growth accelerated at their fastest pace in 16 months in December from a year earlier, and economists expect the uptick will likely be sustained this year, helped by strong domestic demand and an increase in investment spending.
Imports rose 13.2 percent in December from a year ago, the biggest rise since August 2011, reflecting shipment of aircraft orders by the local carriers, with purchases of transport equipment growing an annual 192 percent for the month.
The Philippines' import sector struggled for much of 2012 mainly because of sluggish demand for the country's electronics products such as semiconductors.
The latest data pointed to some modest improvement in the electronics sector, aided by demand picking up overseas. The imports of components and devices, which are mostly used in semiconductor products for exports, contracted 1.2% in December from a month earlier, but improved from November's 8.1% fall.
Positive growth prospects globally suggests electronic exports, the country's top export item, could pick up gradually, according to Semiconductors and Electronics Industries in the Philippines (SEIPI).
Dan Lachica, president of SEIPI, said the group retained its export growth forecast for the sector at 5 to 6 percent this year despite a 5.2 percent drop in 2012.
"We are seeing a brisk recovery in global electronic sales, particularly for telecommunication and handheld computer products, such as new generation mobile phones, tablets or phablets," Lachica said in an email to Reuters.
The Philippine central bank forecast imports will grow 12 percent this year from last year, significantly higher than the 1.9 growth in 2012, backed by domestic consumption and higher investment spending.
Domestic demand will be underpinned by benign inflation and higher remittances from Filipinos overseas, officials have said, supporting economic activity in the nation of nearly 100 million people.
Jeff Ng, economist at Standard Chartered Bank in Singapore, said imports growth will likely catch up with exports this year due to the robust consumption, favourable base effects, and improved external demand for exports.
"We expect improved external demand for exports to increase demand for raw materials and capital goods imports," Ng said.
The $200 billion economy expanded 6.6 percent in 2012, making it the fastest growing economy in Asia after China as of now, reinforcing views the central bank will keep its key overnight borrowing rate steady at a record low of 3.5 percent in the early part of the year.
Data released earlier in the month showed an acceleration in overall exports as shipments of non-electronics items, like tropical fruits and gold, helped offset the weakness in the electronics sector.
Manila is targeting growth of 6 to 7 percent this year