Another discouraging indicator

AMONG the various economic indicators compiled by the Philippine Statistics Authority (PSA), one of the most informative yet most often overlooked is domestic trade, the value and volume of goods moving between different parts of the country. On Friday, the PSA released the domestic trade data for the third quarter of the year, and not surprisingly, there was very little good news that could be squeezed from the report.

The domestic trade data includes trade by volume (measured in millions of tons), and by value (in billions of pesos), and the PSA breaks it further to measure trade inflows and outflows per region. Of the various data, the one that matters is value of domestic trade, as that is reflected in the overall gross domestic product (GDP). Volume is an interesting measure, but since it is a gross indicator – domestic trade is only broken down into nine broad goods categories – and because prices fluctuate over time, it does not tell us much.