Home Forex Domestic trade of goods sees slight recovery in Q2

Domestic trade of goods sees slight recovery in Q2

by
0 comment
COURTESY OF ICTSI

By Ana Olivia A. Tirona, Researcher

DOMESTIC TRADE ACTIVITY slightly bounced back in the second quarter from the previous year, albeit still lower compared with value of locally traded goods in 2019, data by the Philippine Statistics Authority (PSA) showed.

Preliminary results from the PSA report on “Commodity Flow in the Philippines” showed the value of goods traded in the second quarter expanded by 24.5% year on year to P141.77 billion from P113.84 billion in the same period last year when it declined by 46% year on year.

Still, this was lower than the P211.01-billion worth of domestic trade in the second quarter of 2019 prior to the coronavirus disease 2019 (COVID-19) pandemic that has constrained economic activity since the first quarter of last year.

Likewise, the volume of these traded goods went up by 30.1% to 3.74 million tons from 2.88 million tons previously. Similar to the value of trade, volume was also significantly lower compared with the 8.11 million tons logged in the second quarter of 2019.

Commodity flow, also known as domestic trade, refers to the flow of goods in the country through water, air, and rail transport systems. Almost all of the commodities were mainly facilitated through water transport systems.

Six out of the 10 commodity categories monitored by the PSA showed year-on-year growth in trade value. Machinery and transport equipment — which accounted for the biggest share of trade in terms of value at 30.9% — grew 106.3% to P43.83 billion. Its trade volume also jumped with a 92.9% growth to 429,583 tons.

The fastest annual growth rate was seen in “crude materials, inedible, except fuels” with 151.9% to P3.40 billion from last year’s P1.35 billion. Its volume went up 177% to 414,761 tons.

Other commodity groups whose value of trade grew were manufactured goods classified chiefly by material (30.8% to P32.39 billion); commodities and transactions “not elsewhere classified by the Philippine Standard Commodity Classification” (22.9% to P9 billion); beverages and tobacco (17.9% to P5.74 billion); and miscellaneous manufactured articles (7.1% to P4.63 billion).

Eastern Visayas was the top source of commodities in the second quarter, with outflows amounting to P28.87 billion. It had a domestic trade surplus of P15.65 billion, the biggest among the six regions whose exports outnumbered those of imports.

Meanwhile, Northern Mindanao was the top destination of commodities with total inflows reaching P40.35 billion. It posted the biggest trade deficit among 10 regions with P12.59 billion.

Five regions saw their respective trade balances shift in the second quarter compared with the same period last year. Of these, three swung to a surplus from a deficit: Mimaropa (Oriental and Occidental Mindoro, Marinduque, Romblon and Palawan) Region, Western Visayas, and Eastern Visayas. Meanwhile, two of the regions — Northern Mindanao and Soccsksargen (South Cotabato, Cotabato, Sultan Kudarat, Sarangani, and General Santos City) — recorded trade deficits.

In an e-mail, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion attributed the second-quarter results to the “momentum coming from the [April lockdown].”

“There was a pickup in manufacturing and construction in 2Q21. It was also obvious with import recovery during the said quarter,” he added.

To recall, Metro Manila, Cavite, Laguna and Rizal were placed under an enhanced community quarantine (ECQ) from March 29 to April 11 as the government tried to slow the surge in COVID-19 cases. This was later relaxed to a more lenient modified CQ from April 12 to 30.

The economy has been under varying degrees of quarantine since March 2020.

“We see the economy rebounding to 4.9% [GDP] in 2021 and this is an underperformance because of persistent lockdowns and difficult challenges dealing with the control of the spread of the virus,” Mr. Asuncion said when asked on what the latest domestic trade figures signify for this year’s prospects of recovery.

Mr. Asuncion sees domestic trade “sliding to the positive side of year-on-year growth” but that the persisting threats such as the emergence of the more infectious Delta COVID-19 variant “would still be a drag” to domestic trade moving forward.

As of Tuesday, the Health department reported 18,056 new COVID-19 infections and 222 additional deaths. Active cases now stand at 177,670.

Related Posts

Leave a Comment