THE domestic goods trade declined 36.4% year on year by value in the fourth quarter to P105.86 billion, the Philippine Statistics Authority (PSA) said on Tuesday, with trade hampered by the effects of Typhoon Odette (international name: Rai) in December and as the quarantine restrictions on movement continued.
According to the PSA’s preliminary Commodity Flow in the Philippines report, the volume of trade in the fourth quarter declined 29.5% from a year earlier to 3.32 million tons.
Commodity flow includes all goods transported by water, air, and rail transport, with shipping accounting for the bulk of the commodities.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion had expected domestic trade to outperform in the fourth quarter as quarantine restrictions eased mid-quarter.
“There might have been a lag in the loosening of movement restrictions, meaning, easing is not immediately applied all over the country and the reopening of certain areas or provinces would largely depend on the (coronavirus disease 2019) situation,” he said by e-mail.
The second-strictest quarantine setting, Alert Level 4, was in force on Oct. 1-15, 2021, in Metro Manila and other parts of the country. The Alert Level was downgraded to 3 on Oct. 16-Nov. 15. Mobility curbs were further eased to Alert Level 2 until the end of December.
“Since domestic trade is largely over water (99.9%), the weather disturbance of December (i.e., Odette) may have been a factor. Finally, another reason for the contraction may be due to the fact that businesses may have already replenished their stocks earlier in anticipation of a rise in demand due to the reopening of the economy,” Mr. Asuncion added.
In mid-December, Typhoon Odette traversed Mindanao and the Visayas, leaving infrastructure and agriculture damage valued at P17.19 billion and P13.3 billion, respectively.
Nine out of 10 commodity categories monitored by the PSA reported a decline in trade by value. Machinery and transport equipment, which accounted for 30.7% of the value of domestic trade, amounted to P32.49 billion, down 12.1% year on year. By volume, machinery and transport equipment grew 5.2% to 374,618 tons.
Animal and vegetable oils, fats and waxes declined 89% by value to P217.83 million, roughly in line with volume decline of 85.6% to 6,627 tons.
Only two other categories saw increases in trade volume apart from machinery and transport equipment — crude materials, inedible, except fuels, which rose 35.5% to 331,844 tons, and food and live animals, which rose 6.7% to 1.13 million tons.
By value, crude materials, inedible, except fuels was the only category that recorded growth, coming in at P3.76 billion, up 30.3%.
The Eastern Visayas was the top source of commodities in the fourth quarter, with outflows amounting to P23.608 billion. It had a domestic trade surplus of P12.78 billion.
Meanwhile, the Caraga region — which includes Agusan del Norte, Agusan del Sur, Surigao del Norte, Surigao del Sur, the Dinagat Islands, and the city of Butuan — was the top destination of commodities. The region took in an inflow of P28.17 billion, for a trade deficit of P24.29 billion.
Mr. Asuncion added: “Consumer and business sentiment can impact domestic trade” in the months to come if oil prices are to remain above $100 per barrel (/bbl) as a result of the ongoing conflict between Russia and Ukraine.
“For the first quarter of 2022, there may be a slight impact as the price shock plays itself out. However, we know that global oil prices have somehow eased recently from a high of $139/bbl and now to $102/bbl, and this may continue to make prices volatile,” he said.
In late February, Russia invaded Ukraine. The conflict brought the European benchmark, Brent crude, surging past $100/bbl for the first time since 2014.
Mr. Asuncion expects an “improving” domestic economy as quarantine restrictions continued to ease further.
The capital region and various parts of the country were placed under Alert Level 3 in January following an Omicron-driven surge in new coronavirus infections. It was downgraded to Alert Level 2 in February then to Alert Level 1, the most relaxed setting, starting March. — Ana Olivia A. Tirona