Domestic trade in goods fell 36.4% year-on-year in value in the fourth quarter to 105.86 billion pesos, the Philippine Statistics Authority (PSA) said on Tuesday, as trade was hampered by the effects of typhoon Odette (international name: Rai) in December. and as quarantine restrictions on movement continued.
According to PSA’s preliminary Philippine cargo flow report, trade volume in the fourth quarter fell 29.5 percent from a year earlier to 3.32 million tons.
The flow of goods includes all goods transported by sea, air and rail, with maritime transport accounting for the bulk of the goods.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion expected domestic trade to outperform in the fourth quarter as quarantine restrictions eased mid-quarter.
“There may have been a lag in the easing of movement restrictions, which means that the easing is not immediately applied across the country and the reopening of certain areas or provinces would largely depend on the situation. (coronavirus disease 2019),” he said by email.
The second strictest quarantine setting, Alert Level 4, was in effect from October 1 to 15, 2021 in Metro Manila and other parts of the country. The alert level was lowered to 3 on October 16-November. 15. Mobility restrictions have been further eased at Alert Level 2 until the end of December.
“Since domestic trade is largely on water (99.9%), the weather disturbance in December (i.e. Odette) may have been a factor. Finally, another reason for the contraction may be that businesses may have already restocked their inventories earlier in anticipation of a surge in demand as the economy reopens,” Asuncion added. .
In mid-December, Typhoon Odette passed through Mindanao and the Visayas causing damage to infrastructure and agriculture valued at 17.19 billion pesos and 13.3 billion pesos respectively.
Nine of the 10 product categories tracked by the PSA reported a decline in trade in value. Machinery and transport equipment, which accounted for 30.7 percent of domestic trade value, amounted to 32.49 billion pesos, down 12.1 percent year-on-year. In volume, machinery and transport equipment increased by 5.2% to 374,618 tons.
Animal and vegetable oils, fats and waxes fell by 89% in value to P217.83 million, roughly matching the volume drop of 85.6% to 6,627 tons.
Only two other categories recorded increases in trade volume apart from machinery and transport equipment – raw materials, inedible, except fuels, which increased by 35.5% to 331,844 tonnes, and food and live animals, which increased by 6.7% to 1.13 million tonnes.
In value terms, raw materials, inedible, excluding fuels, was the only category to register growth, reaching 3.76 billion pesos, up 30.3%.
The Eastern Visayas were the main source of raw materials in the fourth quarter, with outflows amounting to 23.608 billion pesos. It had a domestic trade surplus of 12.78 billion pesos.
Meanwhile, the Caraga region – which includes Agusan del Norte, Agusan del Sur, Surigao del Norte, Surigao del Sur, Dinagat Islands and the city of Butuan – was the main commodity destination. The region received an influx of 28.17 billion pesos, for a trade ofIfcit of 24.29 billion pula.
Mr Asuncion added: “Consumer and business sentiment can impact domestic trade” in the coming months if oil prices are to remain above $100 per barrel (/bbl) due to the ongoing conflict between Russia and Ukraine.
“For the Iffirst quarter of 2022, there may be a slight impact as the price shock occurs. However, we know that global oil prices have kind of come down recently from a high of $139 a barrel to $102 a barrel, and that could continue to make prices volatile,” he said. .
At the end of February, Russia invaded Ukraine. The dispute pushed Europe’s benchmark Brent crude above $100 a barrel for the first time since 2014.
Mr Asuncion expects the national economy to “improve” as quarantine restrictions continue to ease.
The capital region and various parts of the country were placed under Alert Level 3 in January following an increase in new coronavirus infections caused by Omicron. It was downgraded to Alert Level 2 in February and then to Alert Level 1, the most relaxed setting, from March. — Ana Olivia A. Tirona
