Domestic trade of goods plunges in Q1 — PSA

By Michelle Anne P. Soliman

DOMESTIC TRADE sharply fell in the first quarter, the Philippine Statistics Authority (PSA) reported.

According to preliminary data, the total value of domestic trade declined by 42.7% to P125.31 billion in the three months of 2020 from P218.53 billion a year earlier.

In terms of volume, domestic trade stood at 4.38 million tons, 33.9% less than the 6.62 million tons registered in the same period last year.

Machinery and transport equipment accounted for 35.9% of total value, down 32% year on year at P44.94 billion.

Meanwhile, food and live animals accounted for 36.6% of domestic volume, and increased by 11.6% to 1.60 million tons. Despite this, its value dropped by 42.6% to P29.62 billion.

Double-digit declines in value were also posted by six other commodity groups led by miscellaneous manufactured articles (-70.4%); beverages and tobacco (-61.2%); and chemical and related products not elsewhere classified in the Philippine Standard Commodity Classification (PSCC, -54.1%).

Commodities and transactions “not elsewhere classified in the PSCC” registered a 9.4% decline in trade value.

Western Visayas was the top source of commodities with outflows amounting to P27.92 billion. It recorded a domestic trade surplus of P9.27 billion during the quarter.

Meanwhile, Northern Mindanao was the top destination of commodities with total inflows reaching P36.38 billion, bringing the region’s domestic trade deficit to P24.84 billion in the three months to March.

“The… year-on-year decline in the volume… and value of domestic trade in the first quarter of 2020 may be largely attributed to the supply chain disruptions locally and with the rest of the world at the height of unprecedented lockdowns since the final two weeks of the first quarter which resulted in the sharp reduction in economic activities,” said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in an e-mail.

Global supply chains were disrupted by the coronavirus pandemic in the first quarter. In the Philippines, the government placed Luzon under a strict lockdown in an effort to curb the spread of the virus.

Mr. Ricafort said domestic trade may have likely performed worse in the second quarter given the grim economic data released for the period such as factory output, international trade, remittances, and the gross domestic product.

“[T]he worst in domestic trade may have also been posted in [the second quarter] as consistent with the other economic data,” he said.

The economist said domestic trade may pick up in the second half due to loosening lockdowns in many areas. However, he noted the stricter “modified enhanced community quarantine (MECQ)” that were reimposed in Metro Manila and nearby areas this month “could lead to some soft patch” in domestic trade.

“The expected easing (of lockdowns in) Metro Manila and in nearby areas would result in further reopening of the economy and would lead to better prospects of economic recovery/pick up in the coming months, including domestic trade,” Mr. Ricafort said.

Metro Manila and nearby provinces remain under MECQ until Aug. 18. President Rodrigo R. Duterte is expected to announce the new community quarantine classification for Metro Manila on Monday.