A. Exports

Merchandise exports in the third quarter of 2000, with an index of 235.02, increased by 5.1 percent to $10.251 billion from $9.756 billion in the same quarter of 1999 with an index of 223.66. This was slower than the 13.3 percent gain during the second quarter, 2000. All commodity groups grew except for Other Commodities and Transactions with Mineral Fuels, Lubricants and Related Materials reporting the highest increase at 131.2 percent.

B. Imports

On the other hand, merchandise imports reported $8.291 billion which was 3.6 percent higher than $8.008 billion in 1999. Mineral Fuels, Lubricants and Related Materials reported the highest increase at 52.7 percent among the commodity sections.

This was in contrast to the decline of 4.4 percent registered in the second quarter of 2000.

Volume of merchandise exports in the third quarter of 2000 grew by 9.8 percent, which was slower than the 17.2 percent gain during the same quarter last year. All commodity sections registered positive growth with Animal and Vegetable Oils, Fats and Waxes reporting the highest increase at 108.2 percent.

Electronic Components posted a 9.5 percent increase during the quarter led by Semiconductors which rose by 20.3 percent.

Volume index for total merchandise imports grew by 7.6 percent compared to a decline of 0.2 percent during the previous quarter. This increase was due to the gain in Beverages and Tobacco and Machinery and Transport Equipment at 76.7 percent and 21.2 percent respectively.

This increase was slower than the 13.3 percent increase in the same quarter of last year. The slowdown was due to the decline in Animal and Vegetable Oils, Fats and Waxes by 66.3 percent. Volume reduction in Electronic Components by 5.3 percent also contributed to the lower growth of overall volume of merchandise imports.

Price index for total merchandise exports fell by 4.7 percent compared to the decline of 6.1 percent during the second quarter 2000. The decline on the overall export price index was due to the price reduction of Other Commodities and Transactions by 13.0 percent offsetting the price increase in Mineral Fuels, Lubricants and Related Materials.

Price reduction of 9.8 percent in Electronic Components also contributed to the overall decline during the quarter. This group has a weight of 56 percent in the third quarter export price index.

The price index for the total merchandise imports fell by 4.0 percent compared to the drop of 5.0 percent in the second quarter of 2000. This was due to the price reduction of 14.5 percent of Machinery and Transport Equipment with a weight of 37 percent, which dampened the increase in Mineral Fuels, Lubricants and Related Materials by 45.4 percent and Animal and Vegetable Oils, Fats and Waxes by 30.2 percent.

Electronic Components, led by the price reduction of 26.9 percent in Thermionic cold cathode or photo-cathode valves and tubes, dropped as a group by 11.6 percent.

Merchandise Trade Indexes, namely: value index, quantity index and price index for merchandise exports and imports, are generated by the National Statistics Office. These indexes provide a general measure of the changes in value, volume and prices of exported/imported commodity or group of commodities in a given period of time. Thus, these mainly measure the composite changes in the value, quantity and price of various merchandise trades over time.

The main objective of using indexes is to break down changes in the values of exports or imports into price changes and volume changes. Thus, indexes help us analyze whether a change in value of exports or imports of a commodity or group of commodities can be explained by changes in prices, volumes or both. Furthermore, indexes can be used to (1) measure price behavior in international markets, and (2) serve as basis for calculating volume of merchandise trade which is what is measured in Gross Domestic Product.

The index calculations are based on the customs declarations, i.e., export and import documents, collected by the National Statistics Office from the Bureau of Customs. For purposes of calculating indexes, the information on the F.O.B. value (in US Dollars) and the quantity exported and imported are used. Furthermore, the base year used is 1995 so that the base data used are the values and quantities of exports and imports of specific commodities in 1995. The value index of a commodity is computed as the quotient of current and base year value while the price index of the same is calculated as the ratio of current price over base price. In addition, the relative importance of commodities (i.e., weights) in the total export/import is taken into account in the computation of price index. Finally, the quantity index is derived as the ratio between the computed value index over the computed price index.

The over-all merchandise trade indexes is generated using ten commodity sections in the Philippine Standard Commodity Classification (PSCC). The ten sections are: Food and Live Animals; Beverages and Tobacco; Crude Materials, Inedible, Except Fuels; Mineral Fuels, Lubricants and Related Materials; Animal and Vegetable Oils, Fats and Waxes; Chemicals and Related Products; Manufactured Goods Classified Chiefly by Materials; Machinery and Transport Equipment; Miscellaneous Manufactured Articles and Commodities and Transactions NEC in the PSCC. The most detailed commodity specification contains approximately 8,314 commodity sub-items and they are defined as aggregate of the commodity classification by which the indexes are based on.

Detailed discussion on the methodology can be found in special releases on Foreign Trade posted on the NSO website, http://www.census.gov.ph.