Metro Manila (CNN Philippines) — Although total import payments contracted by an annualized 25.8 percent last December, the National Economic Development Authority is optimistic that the figure will pick-up in the near term.
December’s figure is the steepest year-on-year drop recorded since the 37.1 percent decline in April 2009. The rate was pulled down by declines in raw materials and intermediate goods (-53.2 percent) and consumer goods (-20.3 percent).
“Despite this decline in December, strong domestic demand will prop up imports growth in the near term, as we expect continued expansion in inward shipments of power-generating machines, office and electronic data processing machines, and telecommunications equipment,” said NEDA Deputy Director-General and Officer-In-Charge Margarita Songco in a statement.
“Investor confidence in the country is still growing and is seen to increase investments. This will in turn boost demand for imports of capital goods as well as raw materials and intermediate goods,” she added.
In a statement, NEDA pointed out that the value of imported capital goods — those used for the production of more goods and services — still rose 20.9 percent, and accounted for more than a third of total merchandise exports.
The government office forecasts household consumption to remain strong with “upbeat consumer confidence, low inflation, low interest rates, better employment opportunities, and still positive outlook on remittances inflow.”
“The Philippines’ sound macroeconomic fundamentals should continue to attract attention from investors, both domestic and foreign. The government must pave the way to sustain this renewed interest through institutionalizing reforms from the past five years,” Songco said.
However, she pointed out that the country is at risk of sluggish global growth — a downturn in the country’s major trading partners such as Japan and China might drag down imports, particularly intermediate goods used for electronics exports.
