MANILA (Mabuhay) — Even with the hefty decline registered in December, the government is confident that imports will continue to be supported by the strong demand and growing investor confidence in the country.
“Despite this decline in December, strong domestic demand will prop up imports 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,” NEDA Deputy General and OIC Margarita R. Songco said in an emailed 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,” Songco added.
This developed after the Philippine Statistics Authority (PSA) on Monday announced that imports dropped nearly 26 percent in December, its sharpest fall since 2009 as semiconductor shipments contracted by almost 40 percent.
The same sentiment was shared by University of Asia and the Pacific (UA&P) Economic Program Vice Dean Cid Terosa who said that the drop in December was expected but it is not seen to linger for the rest of the year.
“It was expected to drop but it was surprising that it dropped by so much. Obviously, the drop in petroleum prices and weak global demand depressed imports,” he said in a text message.
“This year imports will improve because of base effects and better global economy outlook towards the end of the year…Domestic demand has remained upbeat,” he added.
However, Terosa said that investor confidence is only expected to kick in after the elections slated in May.
“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,” NEDA’s Songco said. (MNS)