A. Exports

Value index for merchandise exports noted at 216.6 during the quarter in review, went up by 18.9 percent from 182.2 index points a year earlier. The combined index for Mineral Fuels, Lubricants and Related Materials had the biggest increase among the major commodity groups at 47.4 percent.

Value index for Electronics Components, which remains to be the country’s top export earner, grew 24.3 percent.

B. Imports

On the other hand, value index for merchandise imports rose by 14.7 percent during the third quarter of 2002. Five commodity groups posted annual climbs with Machinery and Transport Equipment posting the biggest increment. Value index for this group advanced by 30.1 percent to 170.3 from 130.9 index points.

During the third quarter, value index for Electronics Components increased by 34.8 percent compared to the year-ago level.

After a series of declines in 2001, the volume of merchandise exports showed an increasing trend starting on the first quarter of 2002 by 14.2, 18.1 and 38.7 percent respectively. Positive growths were noted in eight commodity groups during the quarter in review. Mineral Fuels, Lubricants and Related Materials posted the biggest increment at 62.9 percent.

Increments in the index for two sub-groups under Electronics Components contributed to the positive growth of 13.6 percent in the overall export volume index of this main group.

The volume index for the total merchandise imports continued to exhibit a positive growth moving up by 8.7 percent to 150.0 index points during the quarter from 138.0 index points during the same quarter of 2001.

Meanwhile, the volume of importation of Electronics Components also grew by 7.9 percent to 292.1 index points from 270.6 index points.

The price index for total merchandise exports continued to suffer a negative growth beginning the second quarter of 2001. During the quarter in review, the index dropped by 14.3 percent. The slowdown on the overall export price index was due to the decline in seven commodity groups with Commodities and Transactions NEC in the PSCC contributing the biggest decline at 29.4 percent. The growth noted in two groups with Animal and Vegetable Oils, Fats, and Waxes having the higher positive growth of 10.7 percent, failed to offset the overall decline.

Electronics Components registered a combined price index placed at 130.2 index points or a 9.4 percent gain compared to the level a year earlier.

After a continued slowdown in 2001, the price index for total merchandise imports managed to reverse the trend by posting a 5.4 percent increase during the third quarter of the current year. The price increase was observed in two groups, namely: Crude Materials, Inedible, Except Fuels and Commodities and Transactions NEC in the PSCC at 6.2 and 22.8 percent respectively.

Similarly, the price index for imports of Electronics Components went up by 24.9 percent.

A. Objectives and Uses of Merchandise Trade Indexes

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.

B. Source Data and Calculations for Merchandise Trade Indexes

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/data/sectordata/dataftsndx.html.