A. Exports

Merchandise exports reflected an aggregate value index of 220.1, representing a 6.1 percent increment from 207.5 index points during the same quarter of 2002. Composite index for Beverages and Tobacco had the biggest increase as it climbed by 159.9 percent to 384.3 index points from 147.9 index points.

Value index for Electronic Products at 387.6 went up by 4.5 percent from 370.9.

B. Imports

Likewise, the value index for merchandise imports, posted an 8.5 percent year-on-year growth. Leading the group was the Miscellaneous Manufactured Articles group, which displayed a 15.6 percent increase from 124.5 index points to 107.8 index points in 2003.

Value index for Electronic Products accelerated by 166.6 percent to 639.0 from 142.6 index points.

After a series of positive rates since fourth quarter of 2002, the price index for total merchandise exports slightly declined by 0.8 percent to 119.0 index points from 120.0 index points. The downward trend in the overall export price index was due to the decreases in seven commodity groups with Animal and Vegetable Oils, Fats, and Waxes contributing the biggest decline at 26.1 percent. However, increases were observed in three groups with Mineral Fuels, Lubricants and Related Materials having the biggest positive growth of 20.9 percent.

The price index for Electronic Products posted at 208.1 index points represented a 6.5 percent gain over the same quarter of the previous year.

The price index for merchandise imports showed an 8.3 percentage growth during the quarter over the same quarter in 2002. Increases were observed in five major groups with Commodities and Transactions NEC in the PSCC having the largest positive growth at 38.6 percent.

Similarly, the price index for imports of Electronic Products gained by 71.5 percent.

After a series of negative growths during the first to third quarter in 2003, the volume of merchandise exports registered a positive annual growth during the quarter. The index rose by 6.9 percent to 185.0 index points from 173.0 index points. The biggest positive increase was noted in Beverages and Tobacco at 147.9 percent to 370.9 index points from 149.6 index points.

Decreases in the index of four groups under Electronic Products contributed to the negative growth of 1.8 percent. Telecommunications reflected the biggest decline at 69.7 percent.

The volume index for merchandise imports registered a zero percentage rate after it recorded two consecutive decreases since the second quarter of the current year. Positive rates were recorded in six groups with Beverages and Tobacco posting the highest increase at 18.6 percent. On the other hand, negative rates were noted in four groups, the biggest reduction posted by Commodities and Transactions NEC in the PSCC group at 16.5 percent.

Meanwhile, the volume index for Electronic Products was up by 55.5 percent to 274.8 index points from 176.7 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.