REUTERS

THE DECLINE of international trade in the Philippines in the early months of the pandemic was attributed to lockdowns in its export markets rather than domestic restrictions, the World Bank said in a report.

The report, “The Impacts of Lockdown Policies on International Trade in the Philippines” released on Wednesday, contained an analysis of Philippine trade data from 2019 to 2020.

“Our results reveal that domestic lockdown policies did not affect international trade in the Philippines; instead exports and imports plunged due to external lockdowns.”

The Philippines and overseas governments restricted mobility in 2020 to contain the coronavirus disease 2019 (COVID-19). Philippine exports that year declined 10.1% to $63.8 billion, while imports shrank 23.3% to $85.6 billion, according to government estimates.

The report found that lockdowns implemented by trading partners led to a monthly average drop in the value of exports of 7%, along with 56% declines in the value of imports.

“Restrictions on internal movement and international travel controls in partner countries were responsible for the drop in exports,” according to World Bank Economist Angella Faith Montfaucon, along with World Bank consultants Guillermo Carlos Arenas and Socrates Majune, the report’s authors.

Imports also declined due to the disruption of business activity and internal movement restrictions among trading partners, they said. The decline in intermediate goods imports — or parts used in the manufacturing process — led to disruptions in the value chain.

“The Philippines’ top 10 trading partners (mainly China, Japan and the United States) and intermediate goods (especially consumer electronics, and machinery transport equipment), were the key drivers of the drop in imports,” the report found.

Meanwhile, lockdowns affected the Philippines’ intermediate goods exports to a lesser degree, signaling a more robust export role in the global value chain.

Although domestic lockdown restrictions dampen imports due to a decline in local demand, while disrupting exports through reduced manufacturing, the report found no evidence that restrictions in the Philippines affected imports and exports.

In 2021, exports grew 14.5% to $74.64 billion, while imports increased 31.1% to $117.78 billion. — Jenina P. Ibañez