A. Exports

Merchandise exports registered an aggregate value index of 219.4, representing an 11.1 percent growth from 197.5 index points during the same quarter of the previous year. Composite index for Crude Materials, Inedible, Except Fuels had the biggest increase as it grew by 45.9 percent to 102.3 index points from 70.1 index points.

Value index for Electronic Products at 381.2 gained by 12.2 percent from 339.8 index points.

B. Imports

Likewise, the value index for merchandise imports, posted a double-digit annual positive rate at 17.8 percent. Leading the group was Animal and Vegetable Oils, Fats, and Waxes, which showed a 60.1 percent increase from 200.9 index points to 321.8 index points in 2004.

Value index for Electronic Products went up by 27.7 percent to 323.7 from 253.5 index points.

The price index for total merchandise exports fell by 1.7 percent to 117.0 index points from 119.0 index points during the second quarter a year earlier. The downward trend in the overall export price index was due to the decreases in three commodity groups with Mineral Fuels, Lubricants and Related Materials contributing the biggest decline at 22.8 percent. However, increases were observed in five groups with Animal and Vegetable Oils, Fats, and Waxes having the highest positive rate of 50.0 percent.

The price index for Electronic Products at 179.7 index points represented an 8.2 percent decrease over the same quarter of the previous year.

Price index for merchandise imports went up by 2.0 percent to 101.0 index points from 99.0 index points during the quarter a year ago. Increases were observed in six major groups with Mineral Fuels, Lubricants and Related Materials having the biggest positive growth at 28.1 percent.

On the other hand, the price index for imports of Electronic Products dropped by 19.8 percent.

The volume of merchandise exports sustained to register a positive annual growth during the quarter. The index grew by 12.7 percent to 187.0 index points from 166.0 index points. The highest positive increase was noted in Beverages and Tobacco at 47.5 percent to 375.0 index points from 254.2 index points.

Increments in the index of eight groups under Electronic Products contributed to the positive growth of 22.2 percent. Medical/Industrial Instrumentation reflected the biggest increase at 84.0 percent.

The volume index for merchandise imports registered a double-digit year-on-year growth at 15.3 percent. Positive rates were recorded in seven groups with Commodities and Transactions NEC in the PSCC posting the highest increment at 80.9 percent. On the contrary, negative rates were noted in three groups, the biggest reduction was recorded in Beverages and Tobacco at 15.7 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.