DBS Bank sees sharp drop in PHL imports

Philippine imports will grow at a slower pace of 6 percent this year, from 26.9 percent last year, on weak global demand, Singapore-based DBS Bank said Monday. "Currently, a 1.4 percent year-on-year contraction has been penciled in for August. For the full year, import growth is expected to be around six percent," the investment bank stressed. According to the Philippines’ National Statistics Office, imports grew by 14.3 percent to $35.5 billion in the first seven months of the year from $31.06 billion a year earlier. In July alone, imports climbed by 6.6 percent to $4.99 billion from $4.68 billion year-on-year. "There is limited impetus for import growth in the near term. Weak global demand for electronics has translated into negative export growth since May," Singapore’s DBS said. "The external sector is not going to be able to provide a lift to the Philippine economy in the short term," the bank added. Philippines imports last year 26.9 percent to $54.702 billion from $43.092 billion in 2009. The financial services bank noted that export growth also slipped to a 23-month low of -15.1 percent year-on-year in August and will further to contract in September. A readiness to ease monetary policy The Cabinet-level Development Budget Coordination Committee (DBCC) recently lowered its growth projection for the country's gross domestic product (GDP) a range of 4.5 percent to 5.5 percent, from the revised 5 percent to 6 percent, noting the slower growth in the first half and the weak global demand. The GDP expanded by 4 percent in the first half, from 8.7 percent a year earlier, on weak global trade and underspending by the Aquino administration. "Therefore, it was not surprising that the central bank left the benchmark policy rate unchanged at 4.5 percent at the recent monetary policy meeting on October 20," DBS said. Last week, the Bangko Sentral ng Pilipinas also lowered its inflation forecast to 3 percent from 3.4 percent for 2012 and kept its forecast of 4.46 percent for 2011. "This signals a readiness to ease monetary policy further in the coming months if needed," DBS said. — VS, GMA News