Switzerland tops Global Competitiveness Index

Switzerland tops the Global Competitiveness Index for the seventh year in a row, leading the world in its capacity to innovate and scores highly for its education system and labour market efficiency.

Authored by Margareta Drzeniek Hanouz, the Global Competitiveness Report 2015-2016 showed that Switzerland’s infrastructure is strong, its public institutions are effective and transparent, and its macroeconomic environment is more stable than most. The cost of doing business in Switzerland is high – and its strong currency, negative real interest rates and uncertainty about future immigration policy are all cautions against complacency.

Singapore beats everyone but Switzerland for the fifth consecutive year. Its competitiveness is broad-based – it scores in the top 10 in nine out of the 12 pillars. Its particular strengths are the efficiency of its goods, labour and financial markets and the quality of its higher education and training system. It also scores strongly for its infrastructure, macroeconomic stability and the transparency and efficiency of institutions. Areas for improvement include a relatively low rate of participation of women in the workforce.
The United States holds steady in third place. The foundations for its competitiveness include human capital, sophisticated businesses and capacity for innovation, with high levels of spending on research and development and good collaboration between the private sector and academia. It has improved in the last year on measures of government efficiency and the soundness of its financial markets – but the expected phase-out of accommodative monetary policy will test improvements in macroeconomic stability. The US must also avoid complacency on education – the country ranks 18th for quality of education and improvements are required for the nation to remain a talent-driven economy.
Germany is the first mover in this year’s index, climbing one place to fourth thanks in part to improvements in its macroeconomic environment. It has also advanced on the efficiency of financial markets and the labour market – although its low score on labour market flexibility indicates that there is still considerable scope to bolster competitiveness here through further reforms. Germany’s competitive strengths include its highly sophisticated businesses, excellent on-the-job training, rapid uptake of new technologies and supportive research environment.
The Netherlands climbs three places to fifth, regaining its highest-ever position in the index on the back of small improvements across a wide range of indicators. Its strongest scores come in areas including education, infrastructure, institutions, business sophistication and innovation; its weaknesses include inflexibilities in the labour market and continuing doubts about its financial markets. Its score on financial market development is still significantly lower than in 2007, before the global financial crisis and the bursting of the Netherlands’ real estate bubble.
Japan remains in sixth place. Its competitiveness is founded on excellent infrastructure, a healthy workforce and a strong ecosystem for innovation thanks to sophisticated businesses, early adoption of new technologies and high-quality research institutions. Its macroeconomic environment scores more highly than a year ago, due in part to the return of moderate inflation. Japan’s continuing areas of relative weakness include human capital, with a low rate of female participation in the labour force showing that the country is failing to use its talent efficiently.
Hong Kong SAR places seventh for the third consecutive year, with a performance almost unchanged from last year and showing a good degree of consistency across the 12 pillars. Its particular strengths include its well-developed financial sector, transport infrastructure and dynamic goods and labour markets. Innovation is among the pillars of competitiveness on which it performs relatively less well, with business leaders citing Hong Kong’s capacity to innovate as their biggest concern.
Finland drops to eighth from fourth last year, having been third for the two previous years. With unemployment at 9.5%, GDP still 6% lower in 2014 than in 2008, and growing public deficit and debt, Finland’s macroeconomic situation gives some cause for concern. However, it still beats many other advanced economies and the country retains some strong fundamentals: its public institutions are rated as the most transparent and efficient in the world; its higher education and training system is excellent; and it has a strong capacity for innovation.
Sweden overtakes the United Kingdom to claim ninth place, with its competitiveness based on its efficient and transparent institutions, excellent education system, sophisticated businesses and an innovation ecosystem that benefits from high levels of technological adoption. Among the country’s remaining weak spots are overly restrictive labour regulations and tax rate on profits that, while it has decreased in recent years, remains high by international standards.

The United Kingdom slips one place to 10th, despite improving its performance in many areas. Its strengths include solid institutions and some of the best universities in the world. The country’s weak spots include its macroeconomic environment, with high government deficits meaning the public debt has doubled since 2007. The UK’s financial market is still recovering from the crisis, but remains one of the best developed in the world.

The report ranks countries overall by combining 113 indicators grouped under 12 pillars of competitiveness: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.

Philippines improves competitiveness ranking to 47th

The Philippines has improved its competitiveness ranking to 47th place, up by five, behind other Southeast Asian countries in the Global Competitiveness Report 2015 of the World Economic Forum (WEF).
The report noted that among the emerging and developing Asian economies, the competitiveness trends are mostly positive, despite the many challenges and profound intra-regional disparities.
“While China and most of the South-East Asian countries performing well, the South Asian countries and Mongolia (104th) continue to lag behind,” the report said.
The ranking of other Asean nations include Malaysia (18th, up two), Thailand (32nd, down one), Indonesia (37th, down three) and Vietnam (56th, up 12) – all rank in the top half of the overall GCI rankings.
The WEF report said that a failure to embrace long-term structural reforms that boost productivity and free up entrepreneurial talent is harming the global economy’s ability to improve living standards, solve persistently high unemployment and generate adequate resilience for future economic downturns.
The report is an annual assessment of the factors driving productivity and prosperity in 140 countries. This year’s edition found a correlation between highly competitive countries and those that have either withstood the global economic crisis or made a swift recovery from it.
The failure, particularly by emerging markets, to improve competitiveness since the recession suggests future shocks to the global economy could have deep and protracted consequences.
The report’s Global Competitiveness Index (GCI) also finds a close link between competitiveness and an economy’s ability to nurture, attract, leverage and support talent.
The top-ranking countries all fare well in this regard. But in many countries, too few people have access to high-quality education and training, and labour markets are not flexible enough.
First place in the GCI rankings, for the seventh consecutive year, goes to Switzerland with a strong performance in all 12 pillars of the index that showed its remarkable resilience throughout the crisis and subsequent shocks.
Singapore remains in 2nd place and the United States 3rd. Germany improves by one place to 4th and the Netherlands returns to the 5th place it held three years ago.
Japan (6th) and Hong Kong SAR (7th) follow, both stable. Finland falls to 8th place – its lowest position ever – followed by Sweden (9th). The United Kingdom rounds up the top 10 of the most competitive economies in the world.
In Europe, Spain, Italy, Portugal and France have made significant strides in bolstering competitiveness due to the reform packages aimed at improving the functioning of markets.
 Spain was ranked (33rd) and Italy (43rd) climbed two and six places respectively. Similar improvements in the product and labour market in France (22nd) and Portugal (38th) are outweighed by a weakening performance in other areas.
Greece stays in 81st place this year, based on data collected prior to the bailout in June. Access to finance remains a common threat to all economies and is the region’s greatest impediment to unlocking investment.
Among the larger emerging markets, the trend is for the most part one of decline or stagnation, the report said. However, there are bright spots: India ends five years of decline with a spectacular 16-place jump to 55th.
South Africa re-enters the top 50, progressing seven places to 49th. Elsewhere, macroeconomic instability and loss of trust in public institutions drag down Turkey (51st), as well as Brazil (75th), which posts one of the largest falls.
China, holding steady at 28, remains by far the most competitive of this group of economies. However, its lack of progress moving up the ranking shows the challenges it faces in transitioning its economy.
The report also noted that greater resilience against future economic shocks will require further reform and investment in infrastructure, skills and innovation.
 Chile (35th) continues to lead the regional rankings and is closely followed by Panama (50th) and Costa Rica (52nd). Two large economies in the region, Colombia and Mexico, improve to 61th and 57th, respectively.
In the Middle East region, Qatar (14th) leads the region, ahead of the United Arab Emirates (17th), although it remains more at risk than its neighbour to continued low energy prices, as its economy is less diversified.
These strong performances contrast starkly with countries in North Africa, where the highest placed country is Morocco (72nd), and the Levant, which is led by Jordan (64th). With geopolitical conflict and terrorism threatening to take an even bigger toll, countries in the region must focus on reforming the business environment and strengthening the private sector, the report said.
Mauritius remains the Sub Saharan region’s most competitive economy (46th), followed by South Africa (49th) and Rwanda (58th). Côte d’Ivoire (91st) and Ethiopia (109th) excel as this year’s largest improvers in the region overall.
“The fourth industrial revolution is facilitating the rise of completely new industries and economic models and the rapid decline of others. To remain competitive in this new economic landscape will require greater emphasis than ever before on key drivers of productivity, such as talent and innovation,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.
“The new normal of slow productivity growth poses a grave threat to the global economy and seriously impacts the world’s ability to tackle key challenges such as unemployment and income inequality,” said Prof. Xavier Sala-i-Martin of Columbia University.
“The best way to address this is for leaders to prioritize reform and investment in areas such as innovation and labour markets; this will free up entrepreneurial talent and allow human capital to flourish,” said Xavier.

More investments in human capital and infrastructure to improve competitiveness

Balisacan

The Philippine National Economic and Development Authority (NEDA) has underscored the need to improve the macroeconomic competitiveness by closing the infrastructure gap and maintain high levels of public investments in human capital.
 
This was stressed by Economic Planning Secretary Arsenio Balisacan on Wednesday during an economic briefing on human capital development and infrastructure at the Philippine International Convention Center (PICC).
 
“Infrastructure capacity needs to be continuously upgraded to support current and future growth. Let us commit to maintaining the coherence of masterplans, making sure to build on previous gains,” said Balisacan.
 
He noted that various masterplans have been formulated to guide the development and implementation of infrastructure projects and other development interventions. 
 
“We need to ensure the availability of a healthy, highly trainable and skilled labor force and we need to produce more innovators and entrepreneurs.”
 
Balisacan said the country faces a demographic window of opportunity where demographic dividends can be reaped. 
He cited studies estimate that demographic transition was responsible for about one-third of the economic growth experienced by East Asia’s economic “tigers” during the period 1965 to 1995. 
 
“Our own studies, however, show that if we revert the business as usual practices we may not be able to realize as much demographic dividend as our neighbors did.”
 
“The support ratio is the number of effective workers to the number of effective consumers, where each worker or consumer is weighted according to age-specific income or consumption.”
 
Balisacan explained that an increasing trend of the ratio means that more income can be saved or spent for higher consumption.
 
He also noted that there is still a high unmet demand for reproductive health care, which results in unplanned births, particularly for the poorest 30 to 50 percent of Filipino families and must be remedied by fully implementing the Reproductive Health Law. 
 
“Structural transformation is now happening, from low value added to higher value added activities.  This must be further facilitated and there must also be a deliberate strategy to prepare the workforce for structural transformation, so that growth would be inclusive.
 
“We must continue investing in socioeconomic resiliency, while at the same time promoting more sustainable production and consumption patterns including disaster preparedness, income diversification, social protection and insurance.
 
Balisacan cited the importance of strengthening and improving the nation’s institutions, including political ones, as these play a critical role in the development process.
 
“A peaceful and credible transfer of power in 2016 to a new administration which can sustain the reform initiatives of the present government is particularly important. Achievement of lasting peace in Mindanao will likewise be critical in reaping the growth potential of that region and lifting millions of our countrymen out of poverty.
 
He also stressed the need to develop and implement a structural reform agenda that will result in an environment that promotes healthy competition, fosters and rewards innovation and encourages entrepreneurship. 
 
“If we get it right this time, sustained gross domestic product (GDP) growth of about 7% yearly could bring us to higher middle-income economy status with gross national income (GNI) per capita of $4,125 by the end of the next administration,” Balisacan added.

Netherlands is top investor in the Philippines

The Netherlands was the top foreign investor in the second quarter of 2015 with a pledge P17 billion in investments followed by Singapore which committed P8.4 billion and Japan with P4 billion.
The Philippine Statistics Authority (PSA) reported that total foreign investments approved in the second quarter of 2015 by the seven investment promotion agencies inched up by 0.5 percent to P36.2 billion from P36 billion recorded in the same period last year.
Total approved foreign investments for the first half of the year declined by 21 percent to P58 billion from P73.4 billion in the previous year.
The manufacturing industry had the largest share of 60.2 percent of the total amount of committed foreign investments in the second quarter of 2015 at P21.8 billion. Agriculture, forestry and fishing came in second with investment pledges valued at P5.1 billion (14.2 percent), followed by construction at P2.6 billion (7.2 percent).
In terms of location, bulk of the approved foreign investments would be used to finance projects in Region IVA – CALABARZON, amounting to P22.3 billion (61.5 percent) followed by Region VII – Central Visayas at P3.9 billion (10.8 percent) and the National Capital Region at P2.4 billion (6.6 percent).
The total approved investments of both foreign and Filipino nationals dropped by 65.1 percent to P90 billion in the second quarter of 2015 from last year’s P257.8 billion. Filipino nationals continued to dominate investments approved during the quarter, sharing 59.8 percent or P53.8 billion worth of pledges.
The PSA expects 36,196 jobs to the generated from the foreign and local investments approved by the seven investment promotion agencies in the second quarter, lower by 69.5 percent from last year’s projected employment of 118,835 in the same period. Out of the anticipated jobs, 71.5 percent would come from projects with foreign interest.
The investment promotion agencies include the Board of Investments (BOI), Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority (SBMA) as well as the Authority of the Freeport Area of Bataan (AFAB), BOI-Autonomous Region of Muslim Mindanao (BOI-ARMM), and Cagayan Economic Zone Authority (CEZA).Netherlands

Nine in 10 Filipinos trust word-of-mouth recommendations

Earned advertising in the form of word-of-mouth recommendations from people they know and trust continue to be the most trusted source of advertising by Filipino consumers in Philippines.

A new report by Nielsen revealed that nine in 10 Filipino consumers placed trust in word-of-mouth recommendations from people they know, the highest trust level indicated among Southeast Asian consumers for this ad format.

Trust, however, is not exclusive to those in their inner circle. In the report, 80% of Filipino consumers trust editorial content such as newspaper articles, while 75% find consumer opinions online credible.

“While word-of-mouth endorsements continue to earn the biggest trust of consumers, extending the conversation in the digital format can result to quicker and viral results,” Stuart Jamieson, Managing Director of Nielsen Philippines.

“Marketers can widen the circle of trust of consumers by engaging passionate brand advocates to amplify their message and giving them a compelling reason to talk. Trust is fragile. Practice transparency and accountability because if trust is broken, your advocates also have the power to damage credibility and reputation.”

Despite continued media fragmentation, the proliferation of online formats has not eroded trust in traditional paid channels. Ads on television, newspapers, and magazines continue to be among the most trusted forms of paid advertising in the Philippines, surpassing global trust level averages.

Seventy-five percent of consumers in the Philippines say they trust ads on TV (versus 63% global average), closely followed by ads in newspapers at 74% (compared to 60% globally) and ads in magazines at 70% (versus 58% global average).

“While digital ads offer considerable advantages —such as precision-focused campaigns, in-flight adjustments and more creative options—TV still delivers unequalled ability to reach the masses, said Jamieson.  “Cross-platform ad exposure drives greater memorability and brand lift than single platform exposure, even when adjusted for frequency.”

Close to six in 10 (59%) Filipino respondents say they completely or somewhat trust ads on social networks while ads served in search engine results have stayed consistent since 2013 at 56%. Online video ads recorded a positive shift in trust levels compared to 2013, up five points to 56% while trust for online banner ads also improved by three points to 49%.

The Nielsen report also revealed that although trust and action are clearly linked, credibility alone does not drive purchase.

Filipino respondents claim they are more likely to take action on advertising formats, exceeding trust in all formats except editorial content (80% trust and action). Respondents that trust the recommendations of people they know claim they take action on these opinions majority of the time (91% trust; 93% take action) while self-reported action for editorial content.

Aside from being highly credible among consumers, ads on TV also received the highest self-reported action among traditional offline formats at 85%, exceeding trust by 10 points. “TV continues to be a major influencer in the purchase decision of consumers,” said Jamieson.

Formats which earned lower trust levels can be extremely effective in driving consumers to the point of purchase. This is particularly true for online and mobile formats. Self-reported action exceeds trust by more than double digits for text ads on mobile phones (33% trust; 52% take action) and ads on mobile devices (47% trust; 58% take action).

“The formats where action exceeds trust by the greatest margin share a common attribute: easy access to products or services. Online and mobile formats make it easier for consumers take quick action on the advertisement,” observed Jamieson. ”With just a click, consumers are directed to a place where they can receive more information or purchase the item.”

Advertising that used real-life situations was the most likely to resonate among Filipino consumers, followed by ads that are family-oriented, health-themed, value-oriented, and humorous.
“The advertising medium is only part of the formula for reaching consumers. It’s important for consumers to identify and connect with both the brand and message,” advised Jamieson. “Advertisements that feature relatable situations and comedic relief, and which focus on family, values and health greatly appeal to consumers and elicit the most positive response.”

Nielsen’s Global Trust in Advertising Survey polled 30,000 online respondents in 60 countries to gauge consumer sentiment in 19 forms of paid, earned and owned advertising mediums. The results identify the ad formats resonating most strongly with consumers and those that have room to grow.

IMF lauds Philippines for prudent macro-economic management

The International Monetary Fund (IMF) has commended the Philippine government for its prudent macroeconomic management which delivered strong outcomes and set the stage for favorable growth prospects despite external headwinds.
 
In its latest report on the Philippines, the IMF has encouraged continued vigilance in managing risks and supported the government’s focus on infrastructure investment, structural reforms, improving living conditions and achieving more inclusive growth.
 
The IMF has welcomed the government’s plan to step up infrastructure investment and social spending and return to the medium term fiscal deficit target of 2 percent of gross domestic product (GDP).  
 
The Philippine economy continued to expand strongly in line with potential growth as real GDP grew by 6.1 percent in 2014, driven by household consumption, private construction, and exports of goods and services. 
The IMF forecasts real GDP to grow by 6.2 percent in 2015, as lower commodity prices lift household consumption and improved budget execution raises public spending.
 
Lower fuel prices, partly offset by somewhat higher food prices due to assumed moderate El Niño conditions, should help keep inflation in the bottom half of the BSP’s target band, the IMF said. The current account surplus is expected to rise in 2015 due to lower oil prices and continued inflows from business process outsourcing and remittances.
 
The IMF noted that economic growth slowed in the first quarter of 2015 due mainly to temporary factors including the effects of dry weather on agricultural production, weak global demand for exports, and slow budget execution.
“As the economy is growing broadly at potential, there is no evidence of price or wage pressures, and considerable
slack in the labor market remains. The current dry weather associated with El Niño conditions has not yet resulted in higher inflation.”
 
The report cited strong external and fiscal positions with a 2014 current account surplus of 4.4 percent of GDP, gross international reserves of $79.5billion, a national government fiscal deficit of 0.6percent of GDP, and general government debt at 36.4 percent of GDP.
The IMF sees the outlook for the Philippine economy remains favorable despite uneven and generally weaker global growth prospects as fiscal policy is expected to remain prudent.
 
“Risks to the outlook are tilted to the downside. The Philippine government is well equipped to respond as needed with suitable policies should any risks materialize, particularly given the strong fundamentals and ample policy space,” the report noted.

They IMF said that the planned increase in public expenditure in 2015 is appropriate from both cyclical and development perspectives, given the current low inflation, large infrastructure and social needs and low and declining public debt. It has encouraged further efforts to strengthen public financial management and budget execution and mobilize revenue to meet the large social and infrastructure needs.

 
The IMF has considered the current monetary policy stance as appropriate in view of the low inflation, moderating and more balanced credit growth, and moderating—albeit still robust— economic activity and urged continued vigilance, in particular if inflation or credit growth were to accelerate with signs of potential overheating.
 
The report supported Bangko Sentral’s plan to implement an interest rate corridor to improve monetary policy transmission and encouraged the passage of the central bank charter that would authorize the issuance of central bank bills and increase minimum capital. It also emphasized continued exchange rate flexibility, with participation limited to smoothing excessive volatility.
 
IMF noted that the financial system remains sound as it welcomed the use of targeted prudential policies to limit financial excesses, strengthen resilience and more stringent prudential regulations may be needed should any systemic risks become apparent.
 
It also encouraged the passage of the draft law that broadens Bangko Sentral’s financial stability mandate and welcomed BSP’s efforts to enhance access to information on conglomerates’ finances.
 
The IMF supported the government’s medium term priorities that would allow the country to reap the dividends from its young and growing population. These priorities include raising infrastructure spending, facilitating public private partnerships, improving the business climate, and enhancing human capital and social services for the poor.
 
The focus on financial deepening and inclusion as essential elements of the government’s inclusive growth strategy was also noted as the IMF recommended alternative means of financing and hedging such as bond and equity markets to help finance large infrastructure needs.

Focus on investments in infrastructure to sustain inclusive growth

The National Economic and Development Authority (NEDA) has stressed the need to focus on investments in physical infrastructure and human capital development to sustain inclusive economic growth.
 
Economic Planning Sec. Arsenio Balisacan told a public policy forum of the Philippine Institute of Development Studies (PIDS) on Monday that persistent infrastructure bottlenecks, particularly the delays in the completion of infrastructure and reconstruction projects as well as logistical bottlenecks, especially transport, threaten to hamper the pace of economic activity.
 
“Congestion in our roads, ports, airports, and seaports cost us billions of pesos per day and global rankings indicate that the quality of our infrastructure continues to lag behind our ASEAN counterparts,” said Balisacan.
 
He also pointed out the need for long-term solutions to the infrastructure gap remains which are critical and more compelling.
 
“While public infrastructure spending as a percent of gross domestic product (GDP) has been increasing in recent years, we also need to strengthen private sector participation in infrastructure development to keep up with rising demands in our fast-growing economy,” said Balisacan.
 
He noted that human capital development is another crucial component of inclusive growth that would set up the most enabling instrument to lift people from poverty through better education and health care services.
 
“The inability of the poor to benefit from growth can be traced to our underinvestment in human capital in the past. But in recent years, wider fiscal space accompanied by budget reforms, provided government with flexibility to increase human capital investments, particularly in education, health services, and social protection programs.”
 
Balisacan said that major development programs have already taken flight to address critical issues of human capital formation in the country, especially among the poor.
 
“The country’s expanded Conditional Cash Transfer (CCT) Program called 4Ps—which has grown in budget by more than 500% since 2010 and now covers more than 4 million beneficiary households from only 630,000 in 2009.”
 
“The 4Ps is already one of the largest in the world and has demonstrated early gains in improving outcomes for poor children, particularly in increasing enrolment and attendance in school. This initiative not only aims to combat intergenerational poverty but also targets to develop our human resources by widening access to basic education up to high school,” said Balisacan.
 
“The recently-instituted K to 12 basic education program has also jump-started comprehensive reforms in the education sector in the hope of improving the competitiveness and capabilities of our future workforce and abating the skills mismatch in the labor market.”
 
Balisacan said human capital formation will only lead to inclusivity growth if the poor can benefit from the recent economic growth in the form of having suitable and stable employment once they enter the work force.
 
“We must continuously identify and implement educational reforms, enhance workforce competencies, align education and training programs to respond to industry requirements, provide training programs to upgrade skills that can reduce job-worker mismatches, and further equalize opportunities.”
 
Balisacan added that investments in technological innovation and research will prove to be crucial as these can be used as inputs into tangible and actionable policies for the country’s development.

Philippine imports grows 16.9% to US$6.5 billion

Philippine imports grew by 16.9 percent to $6.5 billion in July 2015 from $5.6 billion in the same period last year.
 
The Philippine Statistics Authority (PSA) noted significant increases in inward shipments from the country’s major trading partners buoyed up merchandise imports to US$6.5 billion in July 2015 from US$5.6 billion in the same month last year.
 
Also for the second consecutive month, the Philippines ranked first among monitored economies in East and Southeast Asia in registering imports growth in July 2015. Except for Viet Nam, most trade-oriented economies in the region recorded a decline in imports for the said period.
 
“The steady growth in importation of key imported commodities is expected to further boost the growth of investments and household consumption in the third quarter of 2015. This will offset weak revenues from exports, which remains affected by dampened global demand,” said Economic Planning Secretary Arsenio M. Balisacan.
Meanwhile, increase in outurns for consumer goods (72.8%), raw materials and  intermediate goods (41.1%), and capital goods (32.5%), which all made up for the significant decline in import bills for mineral fuels and lubricants (-76.4%), moderated the growth of imports for July 2015.
 
“Within the near term, imports growth may likely continue as consumer confidence for the third quarter slightly improved to -11.6 from an index of -16.2 during the second quarter,” added Balisacan, who is also the NEDA Secretary.
 
The spending for imported consumer goods grew to US$1.4 billion in July 2015 from US$793.9 million in July 2014 due to higher purchases of both durable goods (up 75.7%) and non-durable goods (up 69.5%). Moreover, growth inimportation of durable goods is accounted for by the increase of importation of passenger cars and motorized cycle.
 
The Chamber of Automotive Manufacturers of the Philippines and Truck Manufacturers Association jointly reported that a total of 10,221 passenger cars were sold in June 2015. This is 23 percent higher compared to the 8,339 units sold in the comparable period last year.
 
Payments for raw materials and intermediate goods, which account for 43.8 percent of the country’s total merchandise imports, increased by 41.1 percent to US$2.9 billion in July 2015 from US$2.0 billion in July 2014. This is a bit lower from last month’s growth of 49.2 percent.
Moreover, the value of imported capital goods marked its sixth consecutive month of doubledigit growth, rising by 32.5 percent to US$1.9 billion in July 2015 from US$1.5 billion in the same period last year.
 
“The current trend in the import of capital goods, consumer goods and raw materials shows a robust domestic demand and a rebound in consumer sentiment towards the end of the year. To further support this growth, the government must quickly catch up on the implementation of various pipeline public infrastructure projects,” said Balisacan.
“On the other hand, the continued low price environment of mineral fuels, lubricants, and other petroleum-based products should provide additional incentive for further expansion of economic activity given strong domestic demand,” he said.