Through Michelle Anne P. Soliman
DOMESTIC TRADE fell sharply in the first quarter, the Philippine Statistics Authority (PSA) reported.
According to preliminary data, the total value of domestic trade fell 42.7 percent to 125.31 billion pesos in the three months of 2020, from 218.53 billion pesos a year earlier.
In terms of volume, domestic trade amounted to 4.38 million tonnes, 33.9% lower than the 6.62 million tonnes recorded in the same period last year.
Machinery and transport equipment accounted for 35.9% of the total value, down 32% year on year to 44.94 billion pesos.
Meanwhile, food and live animals accounted for 36.6% of the domestic volume and increased by 11.6% to reach 1.60 million tonnes. Despite this, its value fell 42.6% to 29.62 billion pesos.
Double-digit declines were also recorded by six other product groups, led by various manufactures (-70.4%); drinks and tobacco (-61.2%); and chemicals and related products not elsewhere classified in the Philippine Standard Product Classification (PSCC, -54.1%).
Goods and transactions “not elsewhere classified in the PSCC” saw a 9.4% drop in trade value.
The Western Visayas were the main source of basic commodities with outflows amounting to 27.92 billion pesos. It recorded a domestic trade surplus of 9.27 billion pesos in the quarter.
Meanwhile, northern Mindanao was the main commodity destination with total inflows reaching 36.38 billion pesos, bringing the region’s domestic trade deficit to 24.84 billion pesos in the three months to March. .
“The … year-over-year decline in volume … and value of domestic trade in the first quarter of 2020 can be largely attributed to supply chain disruptions locally and with the rest of the world at the height of bottlenecks unprecedented since the last two weeks of the first quarter, resulting in a sharp reduction in economic activity, âsaid the chief economist of Rizal Commercial Banking Corp. Michael L. Ricafort in an email.
Global supply chains were disrupted by the coronavirus pandemic in the first quarter. In the Philippines, the government has placed Luzon under strict lockdown in an effort to curb the spread of the virus.
Mr Ricafort said domestic trade would likely have performed less well in the second quarter given the dismal economic data released for the period, such as factory output, international trade, remittances and gross domestic product.
“[T]The worst in domestic trade may also have been posted in [the second quarter] as consistent with other economic data, âhe said.
The economist said domestic trade could pick up in the second half of the year due to the loosening of lockdowns in many areas. However, he noted that the more stringent “Modified Enhanced Community Quarantine (MECQ)” that was re-imposed in Metro Manila and neighboring areas this month “could lead to some sluggishness” in domestic trade.
“The expected easing (of lockdowns in) Metro Manila and neighboring areas would lead to a further reopening of the economy and lead to better prospects for economic recovery / recovery in the coming months, including domestic trade “said Mr. Ricafort.
Metro Manila and neighboring provinces remain under MECQ control until August 18. President Rodrigo R. Duterte is expected to announce the new community quarantine classification for Metro Manila on Monday.