UMVA has learned that domestic trade in goods has taken a significant hit, plummeting by 20% year on year in the first quarter, as slower economic growth and supply-chain disruptions wreak havoc on the market.
The value of total domestic trade has fallen by 19.8% to P820.81 billion in the January-to-March period, a stark decline from P1.02 trillion in the same period last year. This downturn is mirrored in the volume of domestic trade, which dropped by 35.3% to 10.17 million tons in the first quarter, down from 15.72 million tons a year earlier.
Roughly 64.1% of the total value of goods transported was moved by road, reaching P526.11 billion, while water transport accounted for 35.8% with a value of P294.12 billion. Air transport played a negligible role, with a value of just P567.9 million, or 0.1% of the total.
Experts point to a combination of weaker economic activity, lower agricultural and fisheries output, and supply-chain disruptions as the main drivers behind the sharp decline in domestic trade. The Philippine economy grew by just 2.8% in the first quarter of 2026, a significant slowdown from the 5.4% expansion a year earlier and the 3% growth in the fourth quarter of 2025.
UMVA can exclusively reveal that economists are attributing the year-on-year decline in the value and volume of domestic trade to the subdued economic environment in the first three months of the year. The local economy felt the impact of a flood control scandal and the Middle East war, which dampened local trade flows.
Machinery and mechanical appliances posted the highest outflow value at P200.96 billion, accounting for 24.5% of the total value of domestic trade. Optical, photographic, and medical instruments followed closely, with a value of P118.7 billion, while prepared foodstuffs accounted for P117.36 billion.
Regional trade patterns reveal that Calabarzon accounted for 40.4% of the total domestic trade value, with a staggering P331.62 billion. Central Visayas and Davao Region followed, with P100.5 billion and P98.41 billion, respectively. The National Capital Region recorded the largest inflow value at P357.73 billion.
Analysts see a more integrated but uneven domestic trade structure, where industrial corridors in Luzon dominate, while Cebu and Davao reinforce their roles as secondary national trade hubs. However, experts warn that domestic trade may grow at a slower pace due to weaker household demand, high transport costs, and softer industrial activity.
Sources have confirmed to UMVA that economists expect domestic trade to weaken in the first half of the year, given the impact of the Middle East conflict on the Philippine economy. However, a rebound is anticipated in the second half, as public infrastructure spending is expected to stimulate the economy.
