A. Exports

Merchandise exports reflected an aggregate value index of 214.7, representing a 0.9 percent decrease from 216.6 index points during the same quarter of 2002. Composite index for Commodities and Transactions NEC in the PSCC had the biggest decline as it dropped by 10.3 percent to 211.0 from 235.1 index points.

Value index for Electronic Products at 367.2 fell by 3.0 percent from 378.6.

B. Imports

Likewise, the value index for merchandise imports, posted a 3.9 percent year-on-year decline during the third quarter of the current year. Leading the group was the Commodities and Transactions NEC in the PSCC group, which exhibited an 18.9 percent decrease from 185.1 to 150.1 in 2003.

Value index for Electronic Products dropped by 30.4 percent to 263.4 from 378.6.

The price index for total merchandise exports continued to show positive growth in the third quarter of 2003 since the fourth quarter of 2002. During the quarter, the index grew by 22.9 percent. The upward trend in the overall export price index was due to the increases in four commodity groups with Commodities and Transactions NEC in the PSCC at 67.4 percent, contributing the biggest share, followed by Mineral Fuels, Lubricants and Related Materials with 44.8 percent. However, decreases were observed in six groups with Animal and Vegetable Oils, Fats and Waxes having the biggest negative growth of 29.0 percent.

The price index for Electronic Products posted at 194.2 index points represented a 12.3 percent gain over the same quarter of the previous year.

After a series of positive growths since third quarter last year, the price index for merchandise imports displayed a zero percentage growth during the third quarter of the current year. A rise of 4.2 percent was recorded during the previous quarter of 2003.

On the other hand, the price index for imports of Electronic Products declined by 9.6 percent.

After a series of positive growth during the four quarters in 2002, the volume of merchandise exports continued to slowdown starting the first quarter until the third quarter of 2003. The index dropped by a double-digit figure at 19.5 percent to 182.0 from 226.0 index points during the third quarter of last year. The biggest negative growth was noted in Commodities and Transactions NEC in the PSCC at 46.4 percent to 141.8 from 264.8 index points.

Decreases in the index of five groups under Electronic Products contributed to the negative growth of 13.7 percent. Telecommunications reflected the biggest decline at 67.4 percent.

The volume index for merchandise imports registered a negative rate since the second quarter of the current year. The total quantity index during the quarter went down by 4.0 percent posting a 144.0 index points from 150.0 index points during the same quarter of 2002.

The volume index for Electronic Products, was down by 23.1 percent to 168.4 from 219.0 index points.

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.