Domestic trade volume surges on robust economic conditions

THE Philippine Statistics Authority (PSA) said domestic trade volumes surged in the third quarter, though they rose only slightly in value terms.

The volume of commodities traded within the country was 4.86 million tons in the third quarter, up 18.9% from a year earlier.

The value of goods meanwhile rose 3.3% to P153.99 billion.

The commodity flow indicator measures the flow of goods through the water, air, and rail transport systems. Some 99.85% of the trade was mainly coursed through water transport.

Eight commodity categories monitored by the PSA reported an increase in volume, with the “other” category posting a 403.7% rise to 477,935 tons. Value rose 66.8% to P5.35 billion.

Coming in second was beverages and tobacco, up 177.2% at 290,935 tons. Value fell 17.8% to P6.45 billion.

Miscellaneous manufactured articles came in third at 139,780 tons, up 110.5%. Value was P5.86 billion, up 20.4%.

Other commodities that registered gains during the period were manufactured goods classified chiefly by material (74.5% volume growth); animal and vegetable oils, fats and waxes (67.2%), chemical and related products; food and live animals (27.6%); and crude materials, inedible, except fuels (4.1%).

On the other hand, mineral fuels, lubricants and related materials saw a decline in volume of 33.5% to 949,970 tons while value declined 40.8% to P12.67 billion. Meanwhile, machinery and transport equipment came in at 539,022 tons, down 9.2%, though value increased 12.2% to P53.09 billion.

The National Capital Region was the top source of commodities, with outflows amounting to P31.53 billion and the region enjoying a trade surplus of P11.93 billion. Central Visayas, meanwhile, was the top destination, with inflows amounting to P28.04 billion with a trade deficit of P3.57 billion,

Ruben O. Carlo Asuncion, chief economist at Union Bank of the Philippines ( Unionbank), said the country’s economic growth of 6.9% during the quarter “came from increasing trade within the economy due to increasing incomes in general,” noting the economy’s consumption-driven nature.

“Main drivers that drove this movement came from growth in manufacturing and the services sector. Apart from these, the ramp-up of government spending in September, particularly, also helped drive domestic trade,” he added.

Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines (Landbank) concurred: “The expansion in domestic trade in the third quarter of this year was [most] likely driven by the uptick in government expenditures, which boosted business activity.”

Unionbank’s Mr. Asuncion said domestic trade in the fourth quarter will most likely “be a continuation” of the third quarter performance given the boost from public spending.

“With the holidays fast approaching, the demand for goods and services will definitely increase and thus impact the value of domestic trade,” he said.

Mr. Dumalagan of Landbank added: “Government expenditures are expected to pick up further next year on the back of the current administration’s ambitious infrastructure program.”

“There is great possibility that domestic trade will remain strong, despite perhaps some volatility in financial markets caused by external concerns, either monetary policy- related or geopolitical in nature.” —