MANILA, Nov 25 (Reuters) - Philippine imports fell 25.0

percent in September from a year earlier leading to the smallest

monthly trade deficit since a surplus in November 2008.

The statistics office said on Wednesday that imports of

electronics parts, a key component in the country's biggest

export sector, were down 22.1 percent in September after a

revised 21.1 percent fall in August.

The Philippines clocked up a trade deficit of $34 million in

September, bringing the shortfall in the first nine months of the

year to $4.04 billion.

---------------------------------------------------------------

KEY POINTS: Sept 2009 Aug 2009 Sept 2008

Imports (bln) $3.67 $3.62 $4.89

yr/yr change (pct) -25.0 -28.3 3.1

mth/mth change (pct) 1.5 -10.2 -3.0

Exports (bln) $3.64 $3.47 $4.45

Trade balance (mln) -$34 -$144 -$445

Imports in August for key sectors:

- Electronics parts, most of which are later assembled for

export, down 22.1 percent year-on-year to $1.33 billion (August:

down 21.1 percent). Month-on-month, imports of electronics were

up 2.2 percent in September after an 18.7 percent rise in August.

Monthly figures are not seasonally adjusted.

- Mineral fuels, lubricants and related materials: down 30.6

percent year-on-year to $681.7 million (August: down 38.3

percent)

COMMENTARY:

VISHNU VARATHAN, ECONOMIST, FORECAST PTE LTD IN SINGAPORE

'September trade deficit fall narrowed sharply to $34 million

from a deficit of $144 mln in August. This reinforces the

narrowing in trade deficit seen in August and is driven primarily

by imports expansion on the month being outstripped by the

sequential growth in exports.

'It is notable that the trade dynamics and commodity price

trends suggest that the risk of a snap-back in trade deficit

looms large.

'At face value, we note that imports slump in raw materials

and electronics component lagging the jump in tech exports will

have to succumb to some form of pressure release which could be

in the form of imports of electronic components playing catch-up

or maybe exports slowing.

'Either way, trade deficit narrowing that has been driven by

the tear in imports-exports trend will have to correct back

sooner or later; probably sooner.'

PRAKRITI SOFAT, REGIONAL ECONOMIST, BARCLAYS CAPITAL IN

SINGAPORE

'Pretty much in line with our forecast and basically we were

looking for a bounce on a month-on-month basis ... it is just to

be expected after two consecutive monthly contractions.

'I guess it is also in line with the picture being painted by

exports, which are turning around, so clearly demand for

intermediate goods will also be turning around and the domestic

economy is also having some more life breathe into it.

'This is something we are seeing across the region.'

SIMON WONG, ECONOMIST, STANDARD CHARTERED IN HONG KONG

'The narrowing (decline) in imports is still on the right

track but we had expected a stronger narrowing so it was a bit

disappointing.

'We also note that in the breakdown, import of electronic

parts ... still declined 22 percent year-on-year versus 21.2

percent year-on-year drop in August, which signals that the

recovery in Philippines' processing trade sector and exports will

only be gradual.

'Nonetheless, latest data from Taiwan and South Korea both

showed things improved faster in October so we are still hopeful

that we will see the same for Philippines in its next release.'

MARKET REACTION:

- The peso was quoted at 46.96 to the dollar

in early trade, stronger than Tuesday's close at 47.06.

- The stock market was not yet open.

LINKS:

- For more data, the National Statistics Office website is

http://www.census.gov.ph

BACKGROUND:

- Electronics, the top import item, made up 36.3 percent of

total imports in September. Minerals and fuel followed with 18.6

percent.

- Japan was the country's top import source in September,

accounting for 14.6 percent of total purchases, followed by the

United States at 10.4 percent and China at 9.3 percent.

- The Philippines imports nearly all of its crude oil

requirements and is the world's biggest rice buyer.

- The Philippine central bank expects exports to fall 20

percent this year but grow 7 percent in 2010, and imports to slip

17 percent this year and climb 13 percent next year.

- The electronics industry group forecast exports of the

sector to fall 15-20 percent this year, better than an earlier

estimate of a 20 to 30 percent drop, with the industry likely to

post its first annual growth in exports in the fourth quarter.

- The government has forecast third-quarter GDP growth of

between 1.6-2.6 percent from a year earlier, better than the 1.5

percent annual expansion in the second quarter, and putting the

country on track to meet its 0.8-1.8 percent full-year growth

target.

- Apart from electronic parts and fuel, other top imports are

electrical and industrial machinery, transport equipment, iron,

steel and textiles.

(Reporting by Manolo Serapio Jr. and Karen Lema; Editing by Jan

Dahinten)

((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) Keywords: PHILIPPINES ECONOMY/IMPORTS

(karen.lema@thomsonreuters.com; +632 841-8938; Reuters Messaging: karen.lema.reuters.com@reuters.net)

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