The Impacts of Lockdown Policies on International Trade in the Philippines
The Philippines was among the most infected countries in East Asia at the onset of the COVID-19 outbreak. This study analyzes how international trade on various margins was affected by the country’s own lockdown policies and those of trading partne...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2022
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/undefined/412431643226839658/The-Impacts-of-Lockdown-Policies-on-International-Trade-in-the-Philippines http://hdl.handle.net/10986/36882 |
| Summary: | The Philippines was among the most
infected countries in East Asia at the onset of the COVID-19
outbreak. This study analyzes how international trade on
various margins was affected by the country’s own lockdown
policies and those of trading partners. Using a monthly
series of product-by-country data for the period from
January 2019 to December 2020 and an event study design, the
paper shows that domestic lockdown measures did not affect
international trade but external lockdowns affected both ex-
ports and imports. The introduction of lockdown measures by
trading partners affected imports more than exports, leading
to 7 and 56 percent monthly average drops in export and
import values, respectively. Restrictions on internal
movements and international travel controls in partner
countries were responsible for the drop in exports. The
slump in imports was because of workplace closure,
stay-at-home requirements, restrictions on internal
movement, and international travel controls by trading
partners of the Philip- pines. Intermediate goods were the
key driver of the drop in imports following foreign
lockdowns, reflecting supply disruptions in backward global
value chain participation. At the same time, exports of
intermediate goods were more resilient to the lockdown
policies. Finally, both exports and imports were more
affected at the extensive margin than the intensive margin,
as lockdown measures hindered interactions among people, in
turn reducing the potential of businesses to create new
relationships and launch new products in foreign markets.
Overall, diversified and geographically dispersed suppliers
can help countries adjust better to future disruptions. |
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