Domestic trade growth by value eased 10 13.3% in 2022, the Philippine Statistics Authority (PSA) reported Thursday.
According to the PSA’s Commodity Flow in the Philippines final report, the value of goods traded for the year reached amounted to P845.50 billion.
By volume, domestic trade declined 20.1% to 18.63 million tons.
Commodity flow, also known as domestic trade, refers to the flow of goods through water, air, and rail transport systems. Most domestic trade is waterborne.
Robert Dan J. Roces, chief economist at Security Bank Corp., said that the easing in value and decline in volume could be attributed to the China lockdown.
“One possible explanation could be the impact of the restrictive lockdowns in China last year which disrupted global supply chains and dampened demand for certain products,” Mr. Roces said in an e-mail.
He added that global economic uncertainty and political instability, as well as the Russia-Ukraine conflict, may have played a role in dampening domestic trade.
The impact of inflation on consumer purchasing power may have also been a factor
“As prices rise, consumers may become more selective in their spending, leading to reduced demand for certain goods,” Mr. Roces added.
In 2022, the economy saw accelerating inflation, which hit 8.1% in December. In response to these developments, the central bank raised interest rates by a cumulative 400 basis points starting May 2022 bringing the policy rate to a 16-year high of 6%.
Global oil and commodity prices became more unstable after Russia invaded Ukraine in late February 2022, which pushed prices of oil above $100 per barrel amid supply concerns.
Seven out of 10 traded commodity groups monitored by the PSA grew by value last year.
Machinery and transport equipment — which accounted for the biggest share of trade in terms of value at 31.3%— grew 32.2% to P265.06 billion. Volume rose 43.5% to 2.87 million tons.
The value of food and live animals increased 9.5% to P188.97 billion. By volume, it contracted 13.6% to 4.16 million tons.
The value of animal and vegetable oils, fats and waxes accounted for 0.4% by volume. The category was valued at P3.44 billion.
The National Capital Region remained the top source of commodities last year with total outflows amounting to P215.96 billion, for a trade surplus of P150.97 billion.
Meanwhile, Central Visayas was the top destination of commodities with total inflows amounting to P193.16 billion, logging a P36.81 billion trade deficit.
Mr. Roces said that the 2022 domestic trade data highlight the challenges faced by the country and the global economy.
“But with China’s reopening as well as tempering inflation, trade may yet improve by the second half of the year. The volatility in oil prices though remains a risk,” Mr. Roces added. — Abigail Marie P. Yraola
