A. Exports

Merchandise exports posted an aggregate value index of 198.3, representing a 6.7 percent increment from 185.9 index points during the same quarter of 2002. Composite index for Beverages and Tobacco represented the biggest increase as this grew by 107.0 percent to 198.5 from 95.9.

Value index for Electronic Products noted at 343.9 went up by 1.7 percent from 338.0.

B. Imports

Likewise, value index for merchandise imports, figured a heftier 22.4 percent year-on-year increase for the first quarter. Leading the rise was the Mineral Fuels, Lubricants and Related Materials group, which posted a 67.5 percent increase from 103.0 in 2002 to 172.6 in 2003.

Value index for Electronic Products grew by 19.4 percent to 246.2 from 206.3.

After a series of positive growth during the four quarters in 2002, the volume of merchandise exports showed a decrease of 7.8 percent to 165.0 from 179.0 index points. Negative growths were noted in two commodity groups during the quarter in review, namely: Mineral Fuels Lubricants and Related Materials, 25.1 percent and Commodities and Transactions NEC in the PSCC, 33.7 percent. Beverages and Tobacco posted the biggest increment at 84.0 percent or with 161.8 index points, up from 88.0 index points.

Decreases in the index of six groups under Electronic Products contributed to the negative growth of 15.4 percent. Control and Instrumentation reflected the biggest decline at 68.6 percent.

The volume index for merchandise imports resumed a positive growth beginning second quarter of 2002. The total quantity index during the quarter grew by 17.9 percent posting a 138.0 index point from 117.0 index points of same quarter last year.

The volume index for Electronic Products, picked up by 10.2 percent to 160.1 from 145.3 index points.

The price index for total merchandise exports continued to show a positive growth beginning the fourth quarter of 2002. During the quarter, the index climbed by 15.4 percent. The upward trend on the overall export price index was due to the increases in four commodity groups with Mineral Fuels, Lubricants and Related Materials contributing the biggest share at 75.6 percent. However, decreases were observed in five groups with Animal and Vegetable Oils, Fats and Waxes having the biggest negative growth of 7.1 percent.

The price index for Electronic Products posted at 196.4 index points represented a 20.3 percent gain over the same quarter of the previous year.

After a series of slowdowns in 2001, the price index for merchandise imports continued to display a positive growth since first quarter of 2002 up to the current quarter. The increase was 4.2 percent at 100.0 index points compared to 96.0 index during the same quarter last year. The price increases were observed in four groups, with Mineral Fuels, Lubricants and Related Materials posting the largest share at 47.7 percent.

Similarly, the price index for imports of Electronic Products went up by 8.4 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 indexes over the computed price index.

The over-all merchandise trade indexes are 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/datafts.html.