A. Exports

Merchandise exports reflected an aggregate value index of 211.3, representing a 6.5 percent increment from 198.3 index points during the same quarter of 2003. Composite index for Beverages and Tobacco had the biggest increase as it grew by 90.2 percent to 377.5 index points from 198.5 index points.

Value index for Electronic Products at 366.0 accelerated by 6.4 percent from 343.9.

B. Imports

Similarly, the value index for merchandise imports, posted a double-digit positive year-on-year growth at 17.0 percent. Leading the group was the Commodities and Transactions NEC in the PSCC group, which displayed a 60.8 percent increase from 143.7 index points to 231.1 index points in 2004.

Value index for Electronic Products picked up by 34.3 percent to 330.6 from 246.2 index points.

The price index for total merchandise exports continued to fall. It dropped by 4.2 percent to 115.0 index points from 120.0 index points during the first quarter of the previous year. The downward trend in the overall export price index was due to the decreases in seven commodity groups with Beverages and Tobacco contributing the biggest decline at 26.0 percent. However, increases were observed in three groups with Animal and Vegetable Oils, Fats, and Waxes having the biggest positive rate of 5.1 percent.

The price index for Electronic Products at 182.6 index points represented a 7.0 percent decrease over the same quarter of the previous year.

After a series of positive growth since first quarter of 2002, the price index for merchandise imports went down by 7.0 percent to 93.0 index points from 100.0 index points during the quarter of the previous year. Decreases were observed in six major groups with Commodities and Transactions NEC in the PSCC having the largest negative growth at 35.8 percent.

In the same way, the price index for imports of Electronic Products dropped by 22.5 percent.

The volume of merchandise exports sustained to register a positive annual growth during the quarter. The index rose by 11.5 percent to 184.0 index points from 165.0 index points. The biggest positive increase was noted in Beverages and Tobacco at 155.6 percent to 413.5 index points from 161.8 index points.

Increments in the index of six groups under Electronic Products contributed to the positive growth of 14.5 percent. Office Equipment reflected the biggest rise at 49.5 percent.

After posting a zero percentage rate during previous quarter, the volume index for merchandise imports registered a double-digit year-on-year growth at 26.1 percent. Positive rates were recorded in five groups with Commodities and Transactions NEC in the PSCC posting the highest increment at 149.5 percent. On the contrary, negative rates were noted in five groups, the biggest reduction was recorded in Beverages and Tobacco at 15.9 percent.

Meanwhile, the volume index for Electronic Products went up by 73.3 percent to 277.44 index points from 160.06 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.