A. Exports

Merchandise exports recorded an aggregate value index of 245.7, representing an 11.6 percent increase from 220.1 index points during the same quarter of the previous year. Value index for Manufactured Goods Classified Chiefly by Materials had the biggest increase as it grew by 46.3 percent to 145.5 index points from 99.5 index points.

Value index for Electronic Products at 437.3 gained by 12.8 percent from 387.6 index points.

B. Imports

The value index for merchandise imports sustained the double-digit positive growth until 4th Quarter 2004 with 15.0 percent. Animal and Vegetable Oils, Fats, and Waxes, contributed the largest increase of 132.3 percent, from 125.9 index points in 2003 to 292.4 index points in 2004.

Value index for Electronic Products declined by 51.6 percent to 309.3 in 2004 from 639.0 index points in 2003.

The price index for total merchandise exports for 4th Quarter 2004 registered a 5.9 percent increment after it recorded a zero percentage rate during the previous quarter. Positive rates were noted in six groups with Animal and Vegetable Oils, Fats, and Waxes having the highest increase at 39.7 percent. On the contrary, negative growths were observed in four groups with the biggest decline in Mineral Fuels, Lubricants and Related Materials at 28.4 percent.

The price index for Electronic Products at 193.1 index points represented a 7.2 percent reduction over the same quarter of the previous year.

Price index for merchandise imports showed an annual growth of 2.9 percent to 107.0 index points from 104.0 index points during the quarter a year earlier. Increases were observed in six major groups with Mineral Fuels, Lubricants and Related Materials having the biggest positive rate at 38.5 percent.

On the other hand, the price index for imports of Electronic Products went down by 38.8 percent.

The volume of merchandise exports continued to post a positive annual growth during the current quarter. The index rose by 5.4 percent to 195.0 index points from 185.0 index points. The highest positive increase was noted in Mineral Fuels, Lubricants and Related Materials at 37.1 percent to 135.1 index points from 98.6 index points.

Increments in the index of five groups under Electronic Products contributed to the positive growth of 21.6 percent. Control and Instrumentation reflected the biggest jump at 185.5 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

The National Statistics Office generates Merchandise Trade Indexes, namely value index, quantity index and price index for merchandise exports and imports. 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, similarly 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) of 1993. 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.