Amid global economic crisis Imports drop by 34.5 percent in January 2009

Amid the global economic crisis, merchandise imports continue to decline registering a 34.5-percent drop in January this year. This was the fourth consecutive month of import contraction, also a reversal from the 27.9-percent growth in January 2008.

“The year-on-year decline was attributed to the reduction in import payments for all major commodity groups. With exports posting a 40.6-percent decline to US$2.5 billion, the trade deficit in January this year stood at US$759 million,” Socioeconomic Planning secretary and NEDA Director General Ralph G. Recto said in his memorandum to the President.

Meanwhile, the United States remained the biggest supplier of imported merchandise with a 17.7-percent share. “Despite the upward trend of its share in Philippine imports, inward shipments from the US still continue to drop, falling by 23.6 percent in January,” Recto said.

He said that this may be traced to the cutback in foreign orders of the country’s electronic exports. Japan followed as the second major source of imported goods, with a 10.9 percent share. Other top sources of merchandise imports were PR China (10.8%), Singapore (10.3%) and South Korea (7.5%). The total shipments from PR China, Hong Kong SAR, and Taiwan ROC constituted 21.1 percent of the total import payments in January 2009, higher than the 19.1 percent share in the same month last year. As for the commodity groups, inward shipments of capital goods dropped significantly by 33.1 percent in January, with telecommunication equipment and electrical machinery and office and EDP machines posting year-on-year reductions of 49.3 percent and 42.4 percent, respectively.

“However, a hefty increase in payments for imports of aircrafts, ships and boats (323.8%) and a slight improvement in imports of power generating and specialized machines (2.2%) cushioned the further fall of the commodity group,” Recto added. On the other hand, import payments for raw materials and intermediate goods fell by 27.4 percent as the increase in unprocessed raw materials (10.5%) was diminished by the 30.0 percent decline in imports of semi-processed raw materials.

Mineral fuels, lubricants and related materials, which accounted for 12.9 percent of imports in January, posted the largest decline of 59.0 percent among all major commodity groups. The substantial decline in import payments for petroleum crude (-96.5%) canceled out the minimal increases in coal and coke (1.5%) and other mineral fuels, lubricants and related materials (7.3%). Consumer goods posted the smallest decline of 9.5 percent with declines in both durable (-1.0%) and non-durable (-16.4%) goods. The slight decline in durable goods was mostly due to price effects as import volumes grew by 15.1 percent in January.