A. Exports

Merchandise exports posted an aggregate value index of 233.4, representing an 8.7 percent increment from 214.7 index points during the same quarter a year earlier. Composite index for Beverages and Tobacco had the biggest increase as it grew by 77.3 percent to 415.9 index points from 234.6 index points.

Value index for Electronic Products at 400.2 went up by 9.0 percent from 367.2 index points. Telecommunications contributed the major increase at 270.0 percent.

B. Imports

Similarly, the value index for merchandise imports sustained to register a double-digit positive rate at 20.0 percent. Leading the group was Animal and Vegetable Oils, Fats, and Waxes, which showed a 65.5 percent rise from 151.0 index points to 249.9 index points in 2004.

Value index for Electronic Products gained by 25.5 percent to 330.4 from 263.4 index points.

The price index for total merchandise exports registered a zero percentage rate after it recorded three consecutive decreases since fourth quarter of 2003. Positive rates were noted in six groups with Animal and Vegetable Oils, Fats, and Waxes having the highest increase at 48.5 percent. On the other hand, negative growths were posted in four groups with the biggest reduction in Beverages and Tobacco at 15.9 percent.

The price index for Electronic Products at 178.8 index points represented an 8.0 percent decrease over the same quarter of the previous year.

Price index for merchandise imports moved up by 5.1 percent to 103.0 index points from 98.0 index points during the quarter a year earlier. Increases were observed in five major groups with Mineral Fuels, Lubricants and Related Materials having the biggest positive growth at 38.9 percent.

On the other hand, the price index for imports of Electronic Products declined by 13.9 percent.

The volume of merchandise exports continued to mark a positive annual growth during the quarter. The index rose by 8.8 percent to 198.0 index points from 182.0 index points. The highest positive increase was noted in Beverages and Tobacco at 107.0 percent to 459.2 index points from 221.9 index points.

Increments in the index of seven groups under Electronic Products contributed to the positive growth of 18.4 percent. Telecommunications reflected the biggest leap at 251.2 percent.

The volume index for merchandise imports registered a double-digit annual growth at 14.6 percent. Positive rates were observed in eight groups with Animal and Vegetables Oils, Fats, and Waxes posting the biggest increment at 83.0 percent. In contrast, negative rates were noted in two groups, the major reduction was recorded in Mineral Fuels, Lubricants and Related Materials at 6.3 percent.

Meanwhile, the volume index for Electronic Products accelerated by 45.7 percent to 245.3 index points from 168.4 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.