The value of goods imported by the Philippines in January surged 30 percent from a year-earlier--its strongest monthly growth in more than seven years, extending a recovery that started in November that could underpin the performance of the export sector as well as the broader economy in the months ahead.

The National Statistics Office said Thursday imports in January increased to $4.26 billion from $3.27 billion a year earlier, buoyed by increased purchases of electronics, oil products and cereals. The January figure was also higher by 9.4 percent from $3.89 billion in December.

With exports for January earlier reported at $3.58 billion, a trade deficit of $682 million was recorded for the month, narrower than the $759 million posted in the year-earlier period.

Electronics imports, which accounted for one-third of purchases in January, rose 2.2 percent on year to $1.34 billion and were 8.6 percent higher from a month earlier.

Imports from the US, the country's main import source in January, declined 1.4 percent on year to $570 million. Imports from Singapore, largely oil products, rose 61 percent on year to $540 million, while imports from Japan reached $491.8 million, up 38.5 percent from a year earlier.

The Philippines projects exports to expand between 7 percent and 9 percent this year and imports to increase between 13 percent and 15 percent.

"Imports bounced up strongly driven by the turn in domestic demand, reflected in rising imports of capital and consumer goods," said Prakriti Sofat, regional economist with Barclays Capital.

"Going ahead we believe that imports will continue to rise and exports should remain underpinned as well given improved external demand, with key support coming from the turnaround in the global electronics cycle," she added.

The country started to register expansion in monthly imports only in November, following 12 months of contraction amid the global economic downturn kicked off by the collapse of investment bank Lehman Brothers in September 2008.

Exports have been on an upward trend since November, reflecting a recovery in the global electronics market. Electronic products are the Philippines' largest export item, and imported electronic products are primarily reprocessed by semiconductor and other electronics exporters.

Jose Vistan, research director at AB Capital Securities, said the sharp increase in January imports could be attributed in part to the low base in the previous year. Imports in January last year contracted around 35 percent from a year earlier.

"This is a combination of a low base, coupled with recovery in exports, which is very dependent on imports," Vistan said. (Dow Jones)