Merchandise imports in the Philippines declined by 10.8% in November 2014, according to the National Economic and Development Authority (NEDA). Lower values of capital goods imports, including mineral fuels and lubricants, largely cancelled out the higher value of imported raw materials, the agency said.

The Philippine Statistics Authority reported that total import payments fell to USD5.0 billion in 2014 from USD5.6 billion a year ealier. In the same period, the import value of capital goods declined from USD1.9 billion in November 2013 to USD789.4 million in November 2014.

A lull in the re-fleeting program of major airlines, as well as the decline in global crude oil prices, both reduced the value of imported products.

The value, as well as the consumption, of raw materials and foods, however, was up from the previous November. Total payments for raw materials and intermediate goods increased 49.4% to USD2.5 billion in November 2014 from USD1.7 billion the year-ago period.

Economic Planning Secretary and NEDA Director-General Arsenio M. Balisacan said, “The prevailing low oil price environment, which is expected to persist until 2015, may further increase the country’s total oil importation for the remaining part of 2014 and for the whole of 2015 given the country’s high dependence on imported oil. Imports of consumer goods will likewise remain positive for the remaining month of the year, mainly supported by the uptick in domestic consumption primarily of food.”

Low oil prices, Balisacan continued, will encourage consumer activity, with relief from fare hikes and utility costs. The reduction in revenues from oil and tax duties, however, could harm the government’s fiscal position if oil prices continue to be low. To offset this, Balisacan suggests raising excise taxes on petroleum products.