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MANILA, Dec 27 (Reuters) - Philippine imports in October climbed 4.3 percent from a year earlier, the fastest rise in four months, but there was no sign of a major rebound in trade with overall external demand remaining weak.
But the trade picture may be slightly better next year than this year especially with an expected recovery in the United States, one of the country’s major trading partners.
Imports reached $5.24 billion in October against $5.27 billion in September and $5.02 billion a year earlier.
Electronics, the country’s top import accounting for 25.7 percent of total shipments in October, rose 8.7 percent to $1.34 billion, the statistics office said in a statement on Friday.
The electronics sector, which assembles components for shipment later, expects its exports to be flat this year on slow demand mainly from its traditional markets in the West, though it sees modest growth in 2013.
The Philippine peso was slightly firmer in early trade following the release of the data but later slipped to 41.13 per dollar, a shade weaker than Thursday’s close at 41.125.
“There still seems to be a bit of external sector weakness that the Philippines has managed to sidestep in terms of headline GDP data,” said Vishnu Varathan, economist at Mizuho Corporate Bank, Ltd in Singapore, adding trade conditions may improve modestly next year with a U.S. recovery providing a bright spot.
But Varathan emphasized the Philippines needed to increase investment in the manufacturing sector for growth to become more broad-based and to strengthen its ability to compete with other emerging markets in the region such as Myanmar and South Asian countries Sri Lanka and Bangladesh.
The Philippine economy expanded at a faster-than-expected annual pace of 7.1 percent in the third quarter, and the government now expects GDP to grow at around 6.5 percent this year, exceeding its target of 5 percent to 6 percent.
Apart from electronics, other top imports in October were mineral fuels, transport equipment, and industrial machinery.
Exports, which account for about two-fifths of the country’s GDP, climbed 6.1 percent in October from a year earlier because of a low base from last year and rising demand from its Asian neighbours led by Japan.
The Southeast Asian country posted a trade deficit of $832 million in October, bringing the cumulative deficit in the first 10 months to $6.8 billion, the statistics office said.
The United States was the country’s top import source in October, accounting for 11.5 percent of total purchases, with shipments of mainly semiconductors and cereals rising 22.3 percent from a year ago.
The second biggest import source was China with an 11.3 percent share, with shipments up 23.3 percent comprising mostly telecommunications equipment and electrical machinery.
Imports from Eastern Asia - the top import source by economic bloc, accounting for 40 percent of total shipments - were up 7.9 percent in October from a year earlier. Southeast Asia and the European Union were the second and third top economic blocs.
Last month, the Philippine central bank lowered its exports and imports growth forecast for the year to 8 percent and 7 percent, respectively, from previous estimates of 10 percent and 12 percent. (Reporting by Erik dela Cruz and Rosemarie Francisco; Editing by Eric Meijer)