Data from the National Statistics Office showed the country’s total import bill amounted to $4.441 billion in April compared to $3.057 billion the previous year.

April’s annual import growth was a reversal of the 37.1% decline in 2009. It was faster than March’s annual growth of 38.9%.

However, compared to March’s total import bill of $4.543, imports in April were down 2.2%.

Purchases of the country’s main import item, electronics, surged 63.7% to $1.514 billion from $924.74 million last year. Electronics accounted for 34.1% of the aggregate import revenue.

The surge in electronics bodes well for exports in coming months as these products are reassembled for shipment later.

For the first 4 months of the year, total imports went up 35.7% to $17.175 billion from $12.656 billion last year. Similarly, merchandise exports went up 39.1% to $14.925 billion from $10.730 billion during the 4-month period.

The Philippines posted a trade deficit of $2.250 billion for January to April, higher than the $1.926 billion deficit in the same period of 2009.

Japan remained the country’s largest source of imports in April, recording payments worth $561.61 million, 12.7% of the total bill. This was a 42.9% increase from the Arpil 2009 level of $3393.13 million.

The United States came in second with $480.76 million or an 10.8% share of the import bill, followed by Singapore ($445.15 million), China ($355.28 million), and Thailand ($284.13 million).

The central bank expects imports to grow 18% this year and in 2011.

Apart from electronic parts, the Philippines’ other top imports are fuel, electrical and industrial machinery, transport equipment, iron, steel and textiles.

The PSEi advanced 22.40 points or 0.67 percent to close at 3,357.88.

Over 1.81 billion shares worth P3.43 billion changed hands.

Gainers led losers 77 to 40, while 64 issues closed unchanged.

The outlook for both inflation and interest rates remain stable with the Bangko Sentral ng Pilipinas saying that consumer prices would likely stay within the government forecast of 4.7 percent for the year, Jonathan Ravelas, research head of BDO Universal Bank told GMANews.TV.

The central bank’s key policy rates of 4 percent for overnight borrowing and 6 percent for overnight lending are also expected to remain in place until the third quarter, Ravelas said.

The impact of China’s currency announcement – that the yuan would no longer be pegged against the US dollar – that fuelled other Asian markets Monday – also helped lift sentiment among investors in the Philippines, he said.

The situation in the Philippine market is that investors would like be penalized through low interest yield by keeping their money in banks, considering that the PSEi has gained 9.91 percent in the year-to-date, Ravelas explained.

He said the only concern now is the thin volumes, which show that investors are lightening positions as the market moves higher.

This could be a reflection of lingering concerns about the European debt crisis and the concerns with how President-elect Benigno Aquino III would tackle the country’s problem and the Cabinet he would form to run government, Ravelas added.

The main index inched up by 0.7% to 3,357.88, while the broader all-shares index was up 0.5% at 2,137.15.

Traders said the local bourse moved in line with its peers in the region, after China relaxed its grip on its currency, the yuan.

Among the sub indices, only the mining and oil sector finished in the red, losing by half a percent. The property sector outperformed the market, advancing by 1.6%, pulled up by Ayala Land Corp. and Vista Land and Lifescapes.

Market breadth was positive, with advancers trouncing decliners 77 to 40, while 64 issues were unchanged.

A total of 1.81 billion shares worth P3.43 billion changed hands, with Anchor Land Holdings accounting for a tenth of traded shares. The property firm ended flat at P8.70 a piece.

The second most actively traded stock was telecommunications leader Philippine Long Distance Telephone Company which shed 0.4% at P2,405 a share.

The third most actively traded stock was conglomerate DMCI Holdings which rose by as much as 4.3% in mid-session, its highest level since listing in December 1995. Profit-taking by the end of the session trimmed its gains to just 1.4% to P17.50 a piece.

Analysts said investors were bullish about the stocks’s income prospects, especially for its mining and property units.

Global port operator International Container Terminal Services Inc. also rose to a fresh two-year high, surging by 9.8% to P33.50 per share. It was the stock’s best close since May 2008.

ICTSI disclosed it planned to reclassify 1 billion of its preferred shares to raise its foreign investor base.

The Dow Jones industrial average fell about 8 points after climbing nearly 144 in early trading. The Dow had been up the past four days. The Standard & Poor’s 500 index also slid and the Nasdaq composite index fell after seven straight gains.

The initial reaction to China’s weekend announcement was that a stronger yuan compared with the dollar would allow U.S. manufacturers and exporters to be more competitive selling their products in China. But traders came to see the move as more of a long-term shift rather than something that would give the economy a boost now.

A drop in the euro also eroded investors’ excitement over China’s move. A slide in the European currency is seen as a sign of faltering confidence in Europe’s ability to contain its debt problems.

Many of China’s trading partners complain that the country keeps the yuan artificially low to bolster exports. At the same time, the weak currency makes imported goods expensive for consumers in China. Subodh Kumar, an independent investment strategist in Toronto, said some traders at first mistakenly expected to see a lower yuan make demand from China jump the way it did in 2008 when the country enacted a massive economic stimulus plan.

“The notion is that they’re going to get the same kick out of China that they did in 2008,” Kumar said. “Most of China’s moves are long-term.”

But materials companies rose on expectations that demand from China will increase. Aluminum producer Alcoa Inc. gained 5.5 percent, while mining company Cliffs Natural Resources Inc. rose 3 percent.

The news from China hurt retailers because the country’s imports would become more expensive. That could cut into earnings, especially since weak consumer spending limits’ stores ability to pass higher prices on to their customers. Macy’s Inc. fell 3.4 percent, while Wal-Mart Stores Inc. dropped 1 percent.

The focus on China and the euro came on a quiet day with little other news. Light trading volume signaled that many investors were staying out of the market. Traders are looking to a two-day meeting of the Federal Reserve that begins Tuesday. The Fed is expected to keep the federal funds rate, its benchmark interest rate, at historic lows. Traders will be focused on the Fed’s assessment of the economy.

The light flow of news left the market vulnerable to more of the big swings that have been common since major stock indexes hit 2010 highs in late April.

“There’s nothing down there to move it except rumor and innuendo and traders trying to book a few profits before the end of the day,” said James Paulsen, chief investment strategist for Wells Capital Management in Minneapolis, referring to sentiment on trading floors.

The Dow fell 8.23, or 0.1 percent, to 10,442.41. The index had risen 5.2 percent in the past two weeks, its biggest two-week gain since mid-November 2009.

The S&P 500 index fell 4.31, or 0.4 percent, to 1,113.20, and the Nasdaq fell 20.71, or 0.9 percent, to 2,289.09.

Treasury prices fell but were off their lows, while interest rates moved higher. Falling stocks sent more traders searching for the safety of government debt. The yield on the 10-year Treasury note rose to 3.25 percent from 3.23 percent late Friday.

The dollar rose against other major currencies and the euro fell.

Prices for many commodities climbed but ended off their highs. Crude oil rose 64 cents to $77.82 per barrel on the New York Mercantile Exchange. Gold hit a record $1,266.50 an ounce before settling down $17.60 at $1,240.70 an ounce. Copper jumped.

Anadarko Petroleum Corp. rose 88 cents, or 2.1 percent, to $43.45, while Freeport-McMoRan Copper & Gold Inc. rose $2.18, or 3.3 percent, to $68.08.

Alcoa rose 61 cents, or 5.5 percent, to $11.72, while Cliffs Natural Resources rose $1.67, or 3 percent, to $57.89.

A profit warning from California Pizza Kitchen Inc. because of weaker-than-expected sales renewed concerns that consumers will continue to hold back spending while they worry about jobs. California Pizza Kitchen fell $2.06, or 10.9 percent, to $16.83.

Macy’s fell 72 cents, or 3.4 percent, to $20.74, while Abercrombie & Fitch dropped 82 cents, or 2.3 percent, to $34.51.

Three stocks fell for every two that rose on the New York Stock Exchange, where consolidated volume came to 4.5 billion shares, compared with 4.9 billion Friday.

The Russell 2000 index of smaller companies fell 6.89, or 1 percent, to 660.03.

Overseas markets jumped following China’s announcement. They held on to their gains because they closed earlier than U.S. markets. Britain’s FTSE 100 rose 0.9 percent, Germany’s DAX index added 1.2 percent, and France’s CAC-40 climbed 1.3 percent. Japan’s Nikkei stock average rose 2.4 percent, while Hong Kong’s Hang Seng jumped 3.1 percent.

“We welcome the decision insofar as it recognizes PAL’s financial troubles and the need to spin-off non-core services as part of its survival strategy,” PAL said in a statement.

The affected units are in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling, and ramp handling) and call center reservations.

The spin off will entail letting go some 3,500 out of its 7,500 workforce.

The planned retrenchment was originally set on May 31, but was deferred after DoLE assumed jurisdiction over a simmering dispute between PAL management and its labor unions.

PAL had announced that it will outsource its call center reservations to ePLDT Ventus, which would handle reservations, inquiries, bookings, disruption handling, back-office services and other call center services.

Its catering services will be handled by SkyKitchen Philippines, which is owned by businessman Manuel Osmeña. Also, PAL’s cargo handling would be outsourced to Sky Logistics.

At the same time, PAL plans to downsize its medical, information technology and human resource units so that it can let go of 500 more employees.

The cost-cutting measures would save the company about P500 million to P1 billion a year.

“With the DoLE decision, PAL must now focus on the tough challenge of surviving the crisis and competing amidst a difficult operating environment. To do this, PAL must implement various revenue enhancement and cost control initiatives that includes outsourcing,” it said.

PAL is setting aside up to P2.5 billion to compensate the displaced workers.

The Philippine Airlines Employees’ Association (PALEA) slammed DoLE’s “midnight decision.”

“If need be, we are ready to elevate the case up to the Supreme Court. We maintain that contracting out is illegal,” Gerry Rivera, PALEA president and concurrent Partido ng Manggagawa (PM) vice-chairperson, said in a text message to abs-cbnNews.com on Sunday.

Rivera said the DoLE decision was released with suspicious haste and preempted the ongoing mediation proceedings at the DoLE.

The labor union will file a motion for reconsideration on or before June 28, added Rivera.

In another development, PAL was chosen by the Official Airline Guide (OAG) as the best airline in the country for a second year in terms of flights and seat capacity operating out of the Ninoy Aquino International Airport (NAIA).

Data from the OAG, the aviation industry’s main data keeper, showed that NAIA’s four terminals handled 1,859 flights per week in 2009, an increase of 12% over the 1,654 flights per week handled in 2008.

These flights resulted in 309,616 seats per week flown by all airlines using the NAIA complex last year, 11% more than the 278,130 seats per week flown in 2008.

Of this traffic volume, PAL had a market-leading share of 35% of all flights per week, and 38% of all seats flown per week at the country’s premier airport in 2009, stated OAG.