Philippine August imports rise 1.8 percent, trade deficit widens

Philippine August imports rise 1.8 percent, trade deficit widens - UPDATE

	Published : Thu, 25 Oct 2007 04:40 By : Agencies Print this Story

MANILA (Thomson Financial) - Philippine merchandise imports rose at a much slower pace in August than in the previous month

as purchases of electronics eased, government data showed on Thursday.

Imports rose 1.8 percent from a year earlier to 4.971 billion dollars in August after rising 14.3 percent in July, the National Statistics Office said.

With exports down 4.0 percent in August at 4.104 billion dollars, the country recorded a wider trade deficit of 867 million dollars, compared to the previous year's deficit of 610 million.

'Import data in the Philippines is a good indicator of exports, so the August figures tell us there is already a slowdown in the US economy,' said Frederic Neumann, economist at HSBC.

'The weaker pace of imports puts a question mark on the sustainability of the expansion rate of the Philippine economy,' said Neumann.

He said there is a real risk that Philippine exports will underperform in the coming months, in part due to the stronger peso which reduces the competitiveness of local exporters.

Bulk of the country's imports are materials used to make products for export, mostly electronic items.

Electronics imports, which accounted for 46.3 percent of the total import bill in August, grew just 4.6 percent to 2.3 billion dollars, after rising 12.9 percent in July.

Imports of mineral fuel, lubricants and related materials rose 5.9 percent to 970 million dollars or 19.5 percent of the total bill.

Imports of raw materials and intermediate goods, which accounted for 43.4 percent of the total, eased 7.7 percent to 2.1 billion dollars.

With exports slowing in recent months, the Philippine central bank has lowered its growth forecast for exports this year to 8 percent from 11 percent.

It also cut its growth projection for imports to 7 percent from 10 percent.

(1 US dollar = 44.10 pesos)

rocel.felix@thomson.com

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Philippine August imports rise 1.8 percent, trade deficit widens - UPDATE