THE Philippine Statistics Authority (PSA) reported an increase in the country’s domestic trade in terms of value and quantity in 2016 on the back of brisk economic activity.
The volume of commodities traded within the country went up last year, according to data released by the state statistics agency on Friday.
A total of 24.35 million tons were traded in 2016, 25% higher than 19.49 million tons traded a year prior.
Total value of goods likewise increased by 35.6% in 2016 to P861.67 billion from P642.64 billion.
Commodity flow, also known as domestic trade, refers to the flow of goods in the country through water, air, and rail transport systems. Bulk of the trade was mainly facilitated through water transport systems at 99.6%.
Eight commodity categories monitored by the PSA reported an increase in trade quantity, led by machinery and transport equipment, posting a 111% growth to 2.73 million tons from 1,29 million tons in 2015. Its trade value likewise went up by 88.9% to P281.7 billion.
Coming in second were “commodities and transactions not classified elsewhere in the [Philippine Standard Commodity Classification]”, posting an 81.2% jump to 809,710 tons from 446,782 tons, with value going up by 35.8% to P24.8 billion.
Trade of food and live animals – which accounted for the biggest share of trade in terms of quantity – grew 48.2% to 6.6 million tons. Its value also rose 21.5% to P216.2 billion.
Completing the list of trade commodities that registered upticks during the period were beverages and tobacco (18.5% volume growth); crude minerals, inedible, except fuels (11.7%); chemical and chemical products, n.e.s. (10.4%); mineral fuels, lubricants and related materials (7.1%); and manufactured goods classified chiefly by material (5.4%).
On the other hand, volume of animal and vegetable oils, fats and waxes traded declined 41.6% to 103,837 tons from 2015’s 177,798 tons, while total value plummeted 45.5% to P2.9 billion from P5.4 billion.
Trade quantity of “miscellaneous” manufactured articles, meanwhile, was recorded at 722,820 tons, a 0.7% dip from 727,850 tons, but saw an 8.7% increase in terms of value at P40.5 billion from P37.3 billion previously.
Among the regions, the National Capital Region was the top source of commodities, with outflows amounting to P275.6 billion. The region posted a trade surplus of P164.3 billion.
Central Visayas, meanwhile, was the top destination of commodities, with total inflows valued at P174 billion and registering a trade deficit of P32.3 billion.
Economists said increased domestic trade is reflective of the country’s overall economic growth, particularly, in terms of household consumption, which has been a key driver of expansion.
“Note that domestic consumption is one of the main drivers of economic growth in the Philippines. Private consumption, which is about 70% of the country’s GDP (gross domestic product), grew by 6.9% in 2016 over 6.3% in 2015,” said Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines (UnionBank).
George M. Manzano, economist at the University of Asia and the Pacific (UA&P), attributed the growth to 2016 being an election year, wherein “there is a lot of election-related spending, manifested by the increase in goods movements overall.”
The economist, however, cautioned that the use of tonnage is “rather crude” since it fails to account for different types of goods such as a ton of rice and meat. Nevertheless, the 25% volume growth is “rather high” and is “an indication of an increase in movement of goods indicating heightened economic activity.”
Looking forward, the economists said continued expansion in domestic trade hinges on the country’s sustained economic growth.
“I see relatively robust growth for overall domestic trade as 2017 [GDP growth] is expected at 6.5%. Although slower than 2016’s 6.9%, 2017 economic growth will continue to help dictate an expansion in domestic trade moving forward,” UnionBank’s Mr. Asuncion said.
UA&P’s Mr. Manzano shared the same opinion: “If the economy keeps on growing as it did, then there will be more spending, and movement of goods could only increase as a result of the brisk economic activity.” – R.A. Zamora