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The Economic Impact of Geoeconomic Fragmentation of Commodity Markets

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  • Quimba, Francis Mark A.
  • Barral, Mark Anthony A.

Abstract

This study develops a multidimensional Geoeconomic Fragmentation (GEF) Index and applies structural gravity modeling to quantify how rising geopolitical tensions, sanctions, and supply chain disruptions reshape ASEAN and Philippine commodity trade. Using dyad–product–year data (2000–2024), the GEF index integrates political distance, sanctions exposure, tariff barriers, trade intensity, and import volatility. A suite of Poisson Pseudo-Maximum Likelihood (PPML) models—including baseline, structural, and bloc-interaction specifications—captures how fragmentation and global shocks (such as the trade war, COVID-19, the Russia–Ukraine war, and the chip and shipping crises) differentially affect trade with China, the EU, the US, and the rest of the world. Results show that fragmentation reroutes rather than reduces trade, generating asymmetric losses across commodities and identifying highly vulnerable export and import lines for ASEAN and the Philippines. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph.

Suggested Citation

  • Quimba, Francis Mark A. & Barral, Mark Anthony A., 2025. "The Economic Impact of Geoeconomic Fragmentation of Commodity Markets," Discussion Papers DP 2025-49, Philippine Institute for Development Studies.
    • Handle: RePEc:phd:dpaper:dp_2025-49
    DOI: https://doi.org/10.62986/dp2025.49
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