12th National Convention on Statistics (NCS)

EDSA Shangri-La Hotel, Mandaluyong City

October 1-2, 2013

REVISION OF THE PHILIPPINE EFFECTIVE EXCHANGE RATE INDICES

by
Laura Ignacio, Teresita Bascos-Deveza, Hazel Parcon-Santos,
and Maria Fatima C. Paule

For additional information, please contact:

Authors name
Designation
Affiliation
Address
Tel. no.
E-mail

Laura Ignacio, Teresita Bascos-Deveza, Hazel Parcon-Santos,

Maria Fatima C. Paule
Bank Officer V, Deputy Director, Bank Officer V, Bank Officer I
Bangko Sentral ng Pilipinas
A. Mabini St. cor. P. Ocampo St., Malate Manila, Philippines 1004
708-7228
ignacioll@bsp.gov.ph, TDeveza@bsp.gov.ph

Page 1 of 18

REVISIONS IN THE MEASUREMENT OF THE EFFECTIVE EXCHANGE RATE

INDICES OF THE PHILIPPINE PESO
by
Teresita Bascos-Deveza, Laura L. Ignacio, Hazel Parcon-Santos,
and Maria Fatima C. Paule
ABSTRACT
The effective exchange rate (EER) index, as a measurement of the overall value
of one countrys currency against a basket of other currencies, provides a useful indicator
of monetary and financial conditions. The Bangko Sentral ng Pilipinas (BSP) nominal
effective exchange rate (NEER) is a weighted average of bilateral exchange rates with
currencies of trading partners important to Philippine trade. It measures the movement of
the peso against the relevant currencies with indications on import prices and export
demand. The real effective exchange rate (REER), by taking into account inflation levels
in home and trading countries, reflects not only nominal exchange rates but also inflation
differentials with trading partners, and is a measure of international competitiveness.
To make the NEER/REER indices more current, revisions to the calculation of
the indices were introduced that include: (a) changes in the basket of currencies; (b)
change in the weighted average formulation and (c) use of chained indices. The new
indices will be the official effective exchange rate indices of the BSP starting 2014.
The paper discusses the old and new NEER and REER indices including the
changes and various issues involved in the revisions.
Keywords: nominal effective exchange rate, real effective exchange rate, geometric
chained indices

1. Introduction
Like other currencies, the bilateral exchange rate of the Philippine peso varies across
currencies and over time. For example, more pesos are needed to purchase one US dollar
compared to that of one Malaysian ringgit, and in a given period of time, the bilateral exchange
rates could change depending on the buying and selling rate of the peso versus the US dollar or
the ringgit. Considering a basket of currencies, the weighted average change in the pesos
bilateral exchange rate in a given period is known as the nominal effective exchange rate
(NEER) index of the peso. The NEER index measures the net appreciation or depreciation of
the pesos exchange rate relative to a basket of currencies. If the NEER index increases, then,
on average, fewer pesos are needed to purchase a unit of foreign currency while the opposite is
true otherwise. Similarly, the average real change on the exchange rate of the peso across a
basket of currencies is gauged through the real effective exchange rate (REER) index. The
REER is computed as the weighted average change in the inflation- or price-adjusted bilateral
exchange rates across a basket of currencies. Unlike the NEER which measures increases or
decreases on the value of the peso in terms of its equivalent foreign exchange, the REER index
measures the increases or decreases on the amount of goods which the peso could purchase in
the international market. An increase in the REER means that the peso could buy more or
cheaper (imported) goods and services while foreign currencies could buy fewer or more
Page 2 of 18

expensive Philippine exports. Conversely, a decrease in the REER index would yield the
opposite results.
Both the NEER and the REER indices are key indicators for monitoring the possible
impact of exchange rate movements on economic growth. Significant increases of these two
indices could have a negative impact in the countrys current account inasmuch as a high
exchange rate could negatively affect Philippine export products but favor imports. Even the
Business Process Outsourcing industry which is one of the drivers of economic growth in the
country could be affected by exchange rate appreciation. On the other hand, lower indices could
favor exports but discourage imports. Such imbalances could therefore affect either import or
export industries in the Philippines which could cause a slowdown in economic growth.
In view of the importance of monitoring the NEER and REER indices as inputs in crafting
monetary policy that is supportive of a balanced and sustainable economic growth, the Bangko
Sentral ng Pilipinas conducted an in-depth study on the NEER/REER indices with the objective
of making the indices more reflective of current Philippine trade transactions and more accurate
in terms of estimation methodology. Section 2 of this paper shows the current methodology
used in computing the indices while Section 3 focuses on the revisions made in the
methodology such as the currencies included in the basket, the types of indices, the change
from arithmetic to geometric mean and from a fixed base year to chained base method.
Section 4 presents the new BSP indices and compares them to the current indices. Lastly,
Section 5 gives a summary of this paper and discusses future work to be done. On
December 14, 2012, the Monetary Board of the Bangko Sentral ng Pilipinas approved these
revisions and the new indices are already being computed in parallel with the old series until the
end of 2013. Starting 2014, the new indices will be the official effective exchange rate indices of
the Philippine peso.
2. Current Philippine effective exchange rate indices
The BSP currently generates three kinds of indicesMajor Trading Partners index,
Broad Competing index, and Narrow Competing index. The Major Trading Partners index
measures the NEER and REER indices of the peso against the currencies of advanced
economies: the Euro Area, Japan, the United Kingdom and the United States.1 The Broad
Competing index consists of the currencies of seven newly industrialized and emerging
economies in Asia: Hong Kong, Indonesia, Malaysia, Singapore, South Korea, Taiwan and
Thailand. The Narrow Competing index includes the currencies of Indonesia, Malaysia and
Thailand. Trade weights for all three indices were computed based on the countrys share in
the total foreign trade (imports and exports) in goods of the Philippines. Weights vary yearly,
with the trade shares data of the current year used as the weight for the current year. Initially,
the latest available foreign trade data are used as weights in the computation of the indices.
However, the indices are revised as soon as the required trade data becomes available.
NEER index The NEER index is the weighted average change in the exchange rate of
the peso using a basket of currencies. The index is computed relative to a base year, which is
1980. The present weighted averaging of the NEER index makes use of an arithmetic mean
formulation as follows (C in the superscript denotes current):

(1)

In 2003, the indices were revised with the Euro replacing the Deutsche Mark in the basket of currencies.

Page 3 of 18

where

= trade weight of partner country in the th period

= total of exports and imports of Philippines with country in the th period
total of exports and imports of Philippines in the th period

and
with

, peso cross rates percentage change

= dollar rate of the peso in the th period,
= dollar rate of the peso in the base period (1980),
= dollar rate of the th trading partners currency in the base period (1980), and
= dollar rate of the th trading partners currency in the th period.

Rearranging,

is the foreign currency-peso ratio in the

th

where

(2)

year, and

is the foreign currency-peso ratio in the base year

Thus, a positive change in the index from the base year indicates an appreciation and a
negative change, a depreciation of the peso. The NEER index formula in (2) reduces to a
Paasche type exchange rate index.
REER index The REER index is the pesos bilateral exchange rate with a trading partner
deflated by the respective price index ratio.The REER index formula in (3) below is a Paasche
type real exchange rate index.
=
where

)(

)(

) (

) (

(3)

Philippine consumer price index at jth period

= price index (CPI) of ith trading partner country in the jth period

3. Revisions in the Philippine Effective Exchange Rate Indices

3.1 Issues in the formulation of the indices
There are various aspects involved in the formulation of EER indices: (1) currencies
included in the index; (2) identifying the types of indices; (3) average formulation; and
(4) base periods for the exchange rates and weights, and the alternative of a chained index.
3.2 Currencies based on trade shares
Most institutions based their currency selection on total trade shares as follows:
1.
2

The Bank for International Settlements (BIS) broad index includes 52 currencies that
account for 93 percent of the total trade.2

Klau and Fung (2006)

Page 4 of 18

2.

The European Central Bank publishes three EER indices EER-12, consisting of
12 industrialized and newly industrialized trading partners of the euro area; EER-21,
made up of EER-12 plus China and the other eight non-euro area EU Member States;
and EER-41, made up of EER-21 plus 20 other relevant trading partners.3

3.

The US Federal Reserve generates three indices: a broad index with 26 currencies, a
major index with seven major currencies and the other important trading partners
(OITP) index comprising the residual 19 currencies not included in the major index.The
26 currencies selected for the broad index were of countries whose bilateral shares of
US imports and exports exceeded percent of total trade in 1997. The seven
currencies in the major index the euro, Canadian dollar, Japanese yen, British
pound, Swiss franc, Australian dollar, and Swedish krona are traded widely in liquid
financial markets and, therefore, the index is a measure of financial market pressure
against the US dollar.4

4.

Australias trade-weighted index (TWI) includes 21 currencies of trading partners whose

trade with Australia covers at least 90 percent of Australias merchandise and services
trade.5

5.

New Zealands official TWI consists of five currencies US dollar, yen, euro,
Australian dollar and UK pound sterling that comprise 60 percent of New Zealand
trade.6

For the revision of the basket of currencies of the BSPs NEER and REER indices,
the currencies selected were the major trading partners of the Philippinescountries that
contributed at least one percent to the average Philippine total trade (exports and imports) in
the last five years. The revised basket of currencies includes currencies of
14 countries/regions and covers about 95 percent of Philippine total trade.7 From the
14 countries included in the basket, two sub-groups were created, one for advance
economies and the other for developing and emerging economies as shown below:
Table 1. New Basket of Fourteen Currencies of Trading Partners
Advanced countries
Developing and Emerging Markets
USA
China
Singapore
Euro Area
Hong Kong
South Korea
Japan
Indonesia
Taiwan
Australia
Malaysia
Thailand
Saudi Arabia
United Arab Emirates
3.3 Types of indices based on economic development of trading partners
Based on the new basket of currencies, the following three new types of NEER and
REER indices were formulated to match the countrys group of trading partners:
3

Buldorini, Makrydakis and Thimann 2002; http://www.ecb.int/press/pr/date/2009/html/pr091215.en.html

Loretan (2005)
5
http://www.rba.gov.au/statistics/frequency/weights-twi.html
6
Kite (2007)
7
Based on 2006-2010 average trade data.
4

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Table 2. New NEER and REER Indices

New NEER/REER Indices
Basket of Currencies
TPI (Overall)
14 currencies of the major trading partners
TPI-A (Advance)
4 currencies of advanced partner economies
TPI-D (Developing)
10 currencies of partners from developing /emerging markets
The new indices will enable the BSP to monitor changes in the pesos exchange
rates across all major trading partners and also among partners in advance and developing
economies.
3.4 Average Formulation: Use of Chained Geometric Paasche Index
The common practice of central banks and other financial institutions for averaging is
the use of geometric mean. For example, the US Federal Reserve shifted from arithmetic
mean to the use of geometric mean in 19788 while the Reserve Bank of Australia made the
change in 1988.9
The use of geometric rather than arithmetic mean is preferred because of its
desirable properties. An important characteristic is the symmetric treatment given to
depreciations and appreciations of foreign currencies, that is, neither is given a greater
weight. Whereas, the use of arithmetic mean gives more weight to a continuously
depreciating foreign currency even if the weight of the currency is small.10 Revising the
current formulation by changing the method of averaging from arithmetic to geometric (G in
the superscript denotes geometric) yields:
(

(4)
(

( )
(
=

)
(5)

( )(

)(

(6)

3.5 Base period

There are two base periods relevant in the formulation of an EER index: base period
for weights and base period (or reference period) for exchange rates.
(i) Base period for weights. Most institutions use weights that vary across time. However,
their methodologies differ with regard to the frequency of updates. Some institutions use
the average of trade data for several years (3-5 years) as a base period to smooth out
irregular variations. The BIS and the ECB use three-year average trade weights; the
methodology may indicate that the weights are fixed in the sense that the same weights
are used for the entire period until the next set of weights (three-year trade data)
8

US Federal Reserve (1978)

Reserve Bank of Australia (2002)
10
Alsterlind (2006)
9

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becomes available. The BSP updates its weights annually. There is, however, a
problem of attribution in using varying weights across timea change in the index may
be due to changes in exchange rates or in weights.11 Nevertheless, updating weights
periodically would be more effective in reflecting changes occurring in trade.
(ii) Base period for exchange rates. By definition, EER indices reflect changes in bilateral
exchange rates relative to exchange rates in a given base period or reference period.
The norm is for the reference period to reflect both external equilibrium (close to trade
balance) and internal equilibrium (with low unemployment, low inflation and solid GDP
growth), although fulfilling these criteria is difficult. In some cases, the reference period is
chosen because it marks a significant policy event. For the Euro EER, the base period of
first quarter of 1999 (1999 Q1 = 100) is based on institutional reasons, the period being
the start of Stage Three of the Economic and Monetary Union. 12 The base period of
BSPs current EER indices is 1980 not because the year was one of equilibrium but
because it was the year the BSP started to publish the indices. While this fact may pose
the need to revise the reference period, another option is to use chained indices.
Table 3 below shows chained geometric formulations (CH in the superscript
denotes chained) applied to the nominal and real effective exchange rates, making use of
current years trade shares as weights.
Table 3. Comparison of Arithmetic and Chained Geometric Formulations
Arithmetic
(
(

)
)

)(

)(

Chained Geometric
(

)(

(7)
)

(8)

Thus, a chained index links exchange rates and weights on a year-to-year basis it
makes use of varying weights; exchange rates for a particular period are compared with the
exchange rates of the previous period, thus, reference period, in a way, varies from year to
year thereby eliminating the concerns raised by base periods. There is no base year in
the sense of a benchmark against which the performance of an index is measured, only a
chained base year (1980) with a value of 100. Thus, it would be possible to rescale to
another year.
A resulting characteristic, however, of a chained index is that it builds on information
that is accumulated, and tends to retain extreme data such as peaks and troughs.
Therefore, it is not advisable to chain highly volatile time series data. Nonetheless, in such
a case, a solution is to chain geometric series and not arithmetic series that gives more
weight to extreme values.13

11

Coughlin and Pollard (1996)

Buldorini, Makrydakis and Thimann (2002)
13
Gaulier et al. (2008)
12

Page 7 of 18

4. BSPs new NEER and REER indices of the Philippine Peso

4.1 TPI, TPI-A and TPI-D
Using the basket of currencies of major trading partners as shown in Table 2 and the
chained geometric formulas (7) and (8) in Table 3, the new NEER and REER indices of the
Philippine peso were computed, namely, trading partners index (TPI), trading partners
index-advanced (TPI-A) and trading partners index-developing (TPI-D). Figure 1 (a-c)
displays the new indices.14 Among the three, TPI-D has the highest values, TPI-A the lowest
values, and (overall) TPI is in between the two sub-indices.
Figure 1. NEER and REER values of Trading Partner Indices
a. NEER

The NEER (Figure 1a) shows a declining trend for the three indices until 2004 and
generally appreciates thereafter indicating that the peso has been gaining in terms of its
nominal exchange rate vis--vis its trading partners currencies in both advanced and
developing countries.
b. REER

The REER (Figure 1b) of the peso showed a decreasing trend from 1980 to 1987,
recovers from 1988 to 1996 (after EDSA Revolution and before Asian financial crisis),
declines from 1997-2004 and increases thereafter i.e. 2005 onwards. This means that the
pesos real exchange rate have also been appreciating against the currencies of both
advanced and developing partner countries.
14

The values of the indices are displayed in Appendix Table A1-1.

Page 8 of 18

From 2005 onwards, the REER showed a much sharper upward trend than the
NEER due to the combined impact of the pesos nominal appreciation and higher inflation of
the Philippines relative to those of trading partners.
c. Gaps between TPI-D and TPI-A

Figure 1c shows the trends of the gaps between the TPI-D and TPI-A (for the NEER
and REER values). The generally higher positive gap between the NEERs of the TPI-D and
TPI-A from 2007 onwards indicates a bigger nominal appreciation of the peso with respect
to emerging and developing market currencies. This is reflected more in the REER, where
the bigger gap between the REERs of TPI-D and TPI-A indicates bigger real appreciation of
the peso against currencies of developing countries than advanced economies.

4.2 Ceteris Paribus Comparisons

To better evaluate the new indices, ceteris paribus comparisons are made with each
component:
(i) From arithmetic to chained geometric formulation. The charts in Figure 2 compare the
current arithmetic formulation with the chained geometric methodology making use of old
currency baskets. The chained geometric figures follow closely the current arithmetic
formulation, especially the Major index. However there are significant differences
between the arithmetic and chained geometric method for the Narrow and Broad indices
starting 1998. This is because the arithmetic indices (compared to the chained
geometric indices) are more affected by extreme or highly volatile currencies/inflation
rates.

Page 9 of 18

Figure 2. Comparison of arithmetic and chained geometric formulations

using old currency basket
a)

Major NEER

Major REER

b)

Broad NEER

Broad REER

c)

Narrow NEER

Narrow REER

(ii) Inclusion of additional currencies. Figure 3 isolates the impact of the inclusion of
additional currencies by comparing present currency baskets with revised currency
baskets using the present arithmetic formulation. In Figure 3a, the Major index consisting
of currencies of advanced economies is compared with the TPI-A which includes the
additional Australian dollar and excludes United Kingdom pound. The charts show the
two groups having minimal differences.
Figure 3b presents comparison of Broad index countries and TPI-D, which adds China,
Saudi Arabia and United Arab Emirates. The results show that the TPI-D indices (NEER
and REER) were slightly higher than the Broad index indicating that the peso
appreciated more nominally and in real terms albeit small with the addition of the 3 new
currencies in the basket.
Page 10 of 18

Figure 3. Comparison of old and new currency baskets

with arithmetic formulation
a) Major and TPI-A NEER

Major and TPI-A REER

b)

Broad and TPI-D REER

Broad and TPI-D NEER

4.3 Comparison of the old and new indices

(i) TPI-A and Major Trading Partners Index. Figure 4 (based on Appendix Table A1-2)
shows close NEER figures; the small weight of the additional currency (Australian dollar,
3.6 percent) not affecting the general trends of the Major indices. TPI-A has slightly
lower figures for the REER due to the higher inflation rates in the additional country
(Australia) relative to the excluded country (United Kingdom), reflecting the increases in
the REER compared to the old method.
Figure 4. Comparison of existing Major Trading Partners Index and TPI-A

Page 11 of 18

TPI-D and Broad Competing Index. The TPI-D with a broader basket of currencies and
reflecting year-on-year cumulative changes show that the increases in the NEER/REER
was lower/more gradual compared to what is being depicted by the Broad index
(Figure 5, based on Appendix Table A1-3).
Figure 5. Comparison of existing Broad Competing Index and TPI-D

In addition, the chained formulation, which links year-to-year data, tends to moderate the
impact of extreme data. Indeed, differences between the current Broad index and TPI-D
are due to both the inclusion of new currencies and the change to chained geometric
formulation.
(ii) Comparing level and variability of appreciation. A calculation of the percentage change
of the EER indices shows smaller appreciation and lower variability for the new indices
for the period end-January 2012 to end-December 2012 compared to the old indices,
except for TPI-A NEER.
Table 2. Level and Variability of Appreciation of EER indices,
January 2012 - December 2012
Major NEER Major REER Broad NEER Broad REER TPI-A NEER TPI-A REER TPI-D NEER TPI-D REER
Level of Appreciation
Variability *

7.37
0.023

8.96
0.033

7.81
0.027

7.87
0.036

9.29
0.024

4.19
0.015

3.96
0.015

1.03
0.011

*Measured by the coefficient of variation = standard deviation / mean

5. Summary and future research work
Effective exchange rate indices reflect how the domestic currency performs in relation to
currencies of trading countries. Given its importance in policy making, the indices should be
clearly defined, and appropriately and effectively incorporate importance of trading partners and
movements in their respective currencies. The paper describes revisions to the current indices:

the shift to geometric mean would remove the bias created by continually
depreciating currencies on the index;

clarification of the term trading partners would lead to a more proper and effective
interpretation of index;
Page 12 of 18

inclusion of additional currencies gives appropriate weight to important trading

partners that were previously omitted, thus adding more relevant information; and

the use of chained indices would do away with the need to change base year of the
exchange rate.

The changes made the pesos effective exchange rate indices more reflective of the
nominal and real appreciation/depreciation of the peso. The method is also more in line with
more recent improvements made by other central banks.
The new EER indices are being computed in parallel with the present series until the end
of 2013. Starting 2014 the new indices will henceforth be the official EER indices of the BSP. To
keep the various EER indices updated to trends in financial markets and international trade, it is
proposed that the basket of currencies be reviewed every five years or as needed.
Future work. Nonetheless, there are still issues that may need to be considered in the
formulation of EER indices, particularly, with regard to the composition of goods and services,
and the calculation of weights:
a. Inclusion of impacts of third-market competition. A trend in the calculation of
exchange rate indices is the incorporation of the impacts of third market competition
in addition to the bilateral trade shares. Third-market competition is described as
exports of Country A, for example, competing with exports of Country B, in a third
market, Country C. Inclusion of third-market impacts in the computation of EER
indices of Country A recognizes the effects of Country Bs currency changes. This
would, however, require Country A, following the example, to have information on
Country B exports to Country C.
b. Inclusion of trade in services. For the Philippines, the decision to include trade in
services in determining EER weights depends on the importance of trade in services
and the availability of data. For 2010, trade in services amounted to about
US$ 2 billion, about 1 percent of gross national product.15 Given that the Philippines
is a small, open economy with a sizable share of trade in services, the EER indices
may be improved with the inclusion of services in the estimation of country weights.
c. New index on remittances. In recognition of the growing importance of overseas
Filipinos (OF) remittances as a source of foreign exchange, Dakila and Claveria
(2007) constructed an exchange rate index based on OF deployment in place of
trade weights. The currencies included in the basket represent the top 10 countries
of destination of OFs from 1996-2005. The weights were normalized percent share of
each country to total deployment of OFs for each year. The constructed index proved
to be a significant predictor of OF remittances. It may be useful for the BSP to
regularly generate such an index to help explain trends in remittances.

15

BSP Balance of Payments statistics.

Page 13 of 18

REFERENCES
Alsterlind, J. 2006. Effective exchange rates theory and practice. Economic Review Volume
1.SverigesRiksbank.
Buldorini, L., Makrydakis, S. and C. Thimann. 2002. The effective exchange rates of the
Euro. Occasional Paper Series No. 2. European Central Bank.
Coughlin, C. and P. Pollard. 1996. A question of measurement: is the dollar rising or falling?
Federal Reserve Bank of St. Louis Review, July/August 1996 Vol. 78, No. 5.
Coughlin, C., P. Pollard and J. Betts. 1997. To Chain or Not to Chain Trade-Weighted
Exchange Rate Indexes. Working Paper 1996-010.Federal Reserve Bank of St. Louis.
Dakila, Jr. F. and R. Claveria. 2007. Identifying the determinants of overseas Filipinos
remittances: Which exchange rate measure is most relevant? BSP Working Paper
SeriesNo. 2007-02. (Manila: BangkoSentralngPilipinas).
Gaulier, G. J. Martin, I. Mjean, and S. Zignago. 2008. International Trade Price Indices.
CEPII Working Paper No 2008-10 June.CEPII.
Klau, M. and S. Fung, 2006, The New BIS Effective Exchange Rate Indices.BIS Quarterly
Review, March(Basel: Bank for International Settlements).
Kite, H. 2007. A review of the trade weighted exchange rate index. Reserve Bank of New
Zealand Bulletin Vol. 70, No. 2.
Loretan, M. 2005. Indexes of the Foreign Exchange Value of the Dollar.Federal Reserve
Bulletin.Winter 2005. (Washington, DC: Federal Reserve Board).
Reserve Bank of Australia. 2002. Developments in the Trade-Weighted Index. Reserve Bank
of Australia Bulletin October 2002.
Reserve Bank of New Zealand. 1998. Revisions to the Reserve Bank of New Zealand TradeWeighted Exchange Rate Index (TWI). News release.
US Federal Reserve. 1978. Index of the Weighted-Average Exchange Value of the U.S.
Dollar: Revision. Federal Reserve Bulletin August 1978.
Waiquamdee, Atchana, PitiDisyatat and RunchanaPongsaparn (2005).
Effective
Exchange Rates and Monetary Policy: The Thai Experience, Bank of Thailand
Discussion Paper, 04/2005.

Page 14 of 18

Appendix. Values of Trading Partner Indices and Comparisons

Table A1-1. NEER and REER Values of Trading Partner Indices
NEER
All Major
Trading
Partners
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012

TPI
100.00
93.47
89.22
68.55
45.66
41.87
37.20
36.41
34.24
33.18
30.65
26.66
28.43
25.78
26.10
26.37
26.74
24.62
19.39
18.97
16.96
15.45
15.18
13.81
12.93
13.07
13.95
15.06
15.07
14.25
14.52
14.42
14.92

Advanced
Major Trading
Partners
TPI-A
100.00
90.66
86.08
64.35
42.11
37.88
32.98
32.38
30.44
29.83
27.82
23.96
25.59
22.65
22.65
22.95
23.53
21.19
15.65
15.10
13.61
12.37
12.19
10.81
9.96
10.18
11.12
12.07
11.75
10.81
11.25
11.12
11.62

REER
Developing and
Emerging
Trading
Partners
TPI-D
100.00
100.60
97.19
79.82
55.33
52.68
49.20
47.80
44.95
42.44
38.41
34.12
36.24
34.63
35.93
36.14
35.89
34.46
30.55
30.52
26.97
24.68
24.12
22.65
21.58
21.56
22.49
24.17
24.75
23.98
24.08
23.98
24.65

All Major
Trading
Partners
TPI
100.00
95.73
95.80
77.77
74.86
81.77
72.00
71.43
74.00
76.93
76.22
75.59
84.77
79.47
86.18
90.11
95.77
91.08
76.48
78.58
71.96
68.10
68.17
62.79
60.48
63.83
70.38
76.17
78.99
77.68
80.56
81.08
84.62

Advanced
Major Trading
Partners
TPI-A
100.00
92.77
92.05
72.59
68.57
73.12
63.10
62.80
65.51
69.16
69.30
68.59
77.56
71.51
77.52
82.35
89.20
83.20
66.34
66.99
61.61
58.04
58.18
52.09
49.54
52.99
59.86
65.74
67.35
64.84
69.50
70.63
75.16

Developing and
Emerging
Trading
Partners
TPI-D
100.00
103.23
105.35
91.73
92.22
105.56
97.67
96.14
97.82
98.04
94.78
94.37
103.92
101.00
109.61
111.38
114.25
112.79
104.13
109.87
99.99
95.27
95.20
90.77
88.76
92.31
99.35
106.20
111.23
111.54
113.02
112.97
116.30

Source: Department of Economic Statistics, BSP

Notes:
TPI: Australia, Euro Area, U.S., Japan, Hong Kong, Taiwan, Thailand, Indonesia, Malaysia, Singapore,
South Korea, China, Saudi Arabia, and U.A.E.
TPI-A: U.S., Japan, Euro Area, and Australia

Page 15 of 18

TPI-D: Hong Kong, Taiwan, Thailand, Indonesia, Malaysia, Singapore, South Korea, China, Saudi Arabia,
and U.A.E

Page 16 of 18

Table A1-2. Comparison of existing Major Trading Partners Index and proposed TPI-A
NEER
REER
Majors
TPI-A
Majors
TPI-A
1980
102.70
100.00
99.44
100.00
1981
101.17
90.66
106.80
92.77
1982
100.89
86.08
110.04
92.05
1983
78.52
64.35
86.36
72.59
1984
53.37
42.11
82.89
68.57
1985
48.17
37.88
89.28
73.12
1986
38.92
32.98
70.03
63.10
1987
35.60
32.38
64.32
62.80
1988
33.15
30.44
65.64
65.51
1989
32.80
29.83
70.11
69.16
1990
28.81
27.82
66.20
69.30
1991
25.09
23.96
65.95
68.59
1992
26.48
25.59
73.22
77.56
1993
24.96
22.65
72.21
71.51
1994
24.86
22.65
76.54
77.52
1995
24.70
22.95
80.28
82.35
1996
24.93
23.53
86.97
89.20
1997
23.50
21.19
84.23
83.20
1998
17.54
15.65
67.21
66.34
1999
18.25
15.10
76.68
66.99
2000
16.61
13.61
71.92
61.61
2001
14.72
12.37
67.37
58.04
2002
14.27
12.19
66.50
58.18
2003
12.44
10.81
59.94
52.09
2004
11.28
9.96
57.46
49.54
2005
11.64
10.18
61.98
52.99
2006
12.91
11.12
70.00
59.86
2007
14.01
12.07
76.26
65.74
2008
13.79
11.75
80.17
67.35
2009
12.83
10.81
77.32
64.84
2010
13.30
11.25
84.08
69.50
2011
13.17
11.12
86.03
70.63
2012
13.86
11.62
91.80
75.16
Source: Department of Economic Statistics, BSP
Notes:
Majors: U.S., Japan, Euro Area, and UK
TPI-A: U.S., Japan, Euro Area, and Australia

Page 17 of 18

Table A1-3. Comparison of existing Broad Competing Index and proposed TPI-D
NEER
REER
Broad
TPI-D
Broad
TPI-D
1980
100.84
100.00
101.44
100.00
1981
102.85
100.60
101.81
103.23
1982
100.14
97.19
102.29
105.35
1983
85.85
79.82
91.58
91.73
1984
58.62
55.33
88.95
92.22
1985
53.37
52.68
100.51
105.56
1986
50.26
49.20
92.92
97.67
1987
48.59
47.80
90.83
96.14
1988
44.50
44.95
87.44
97.82
1989
42.95
42.44
89.56
98.04
1990
39.13
38.41
86.90
94.78
1991
34.52
34.12
84.32
94.37
1992
37.02
36.24
92.68
103.92
1993
35.83
34.63
90.90
101.00
1994
35.75
35.93
94.61
109.61
1995
37.44
36.14
100.78
111.38
1996
37.10
35.89
105.67
114.25
1997
36.48
34.46
106.11
112.79
1998
40.37
30.55
121.37
104.13
1999
37.01
30.52
117.82
109.87
2000
32.33
26.97
109.12
99.99
2001
33.91
24.68
114.49
95.27
2002
30.88
24.12
106.22
95.20
2003
28.83
22.65
99.91
90.77
2004
27.94
21.58
100.86
88.76
2005
26.83
21.56
101.51
92.31
2006
28.17
22.49
109.09
99.35
2007
31.78
24.17
119.79
106.20
2008
36.40
24.75
136.32
111.23
2009
41.79
23.98
146.46
111.54
2010
36.63
24.08
137.65
113.02
2011
40.97
23.98
143.00
112.97
2012
43.66
24.65
151.89
116.30
Source: Department of Economic Statistics, BSP
Notes:
Broad: Hong Kong, Taiwan, Thailand, Indonesia, Malaysia,
Singapore, South Korea
TPI-D: Hong Kong, Taiwan, Thailand, Indonesia, Malaysia,
Singapore, South Korea, China, Saudi Arabia, and U.A.E

Page 18 of 18