Philippine July imports rise to 7-month high on tech bounce

By Erik dela Cruz and Karen Lema

MANILA – Philippine imports grew at their best pace in seven months in July on a jump in electronics shipments as demand from key markets in Asia and the United States improved, providing another growth driver for one of the region’s fastest growing economies.

Imports in July rose a surprisingly strong 8.7 percent from a year earlier, data from the statistics agency showed on Wednesday, supported by a 33.1 percent bounce in tech imports, the first rise this year and the fastest in more than two years.

The Philippines is a key part of the region's electronics export chain as it provides about 10 percent of the world’s semiconductor manufacturing services, including for mobile phone chips and microprocessors.

"The pretty strong import growth number from the Philippines suggest that domestic demand remains supportive to overall growth momentum, and indeed, the strong showing of electronics imports could also suggest a better pick-up in export growth going forward," said Gundy Cahyadi, economist at DBS in

Singapore.

"Signs of stabilisation in the euro zone and the nascent turnaround in the Chinese economy would bode well for export demand in the coming months," Cayhadi said.

Wednesday's data beat some economists' expectations for a small decline and June's drop of 4.8 percent on year. It also followed a strong showing in export numbers in July. Exports grew 2.3 percent year-on-year, led by electronics shipments rising 11.2 percent to an eight-month high.

Manila's largest imports are inputs used by the semiconductor and electronics industry, also the biggest export sector and a major contributor to the economy.

The electronics industry, which assembles components for shipment later, is banking on a pick-up in global demand for smartphones and tablets to help exports of the sector grow 5 to6 percent this year.

Apart from electronics, other top imports in July were mineral fuels, transport equipment, and industrial machinery.

China was the country's top imports source in July, accounting for 13.4 percent of total purchases followed by the United States with 11.3 percent and South Korea with 8.6 percent

Imports from East Asia, the top import source by economic bloc and accounting for 40.7 percent of the total, climbed 12.1percent in July from a year earlier.

The Philippine economy expanded by a faster-than-expected 7.5 percent in April-June, matching China's expansion for the second consecutive quarter as domestic spending and investments buttressed it from capital outflows and weak exports.