INTERNATIONAL TRADE ANALYSIS BETWEEN INDONESIA AND PHILIPPINES BEFORE AND AFTER ASEAN-CIDNA FREE TRADE AGREEMENT

Abstract

The research aim is to show how exchange rates and inflations predict exports and imports before and after free trade by using Indonesia-Philippines data analysis technique namely regression analysis, partial (t-test), simultaneous (F-test) and adjusted square. Sources of data are obtained from legal website of Central Bureau of Statistics of Indonesia. The data of import-export are divided into two parts, namely from 2005 to December 2009 is used to measure the performance of data before Free Trade. And from 2010 to 2014 is used to measure the performance of data after free trade.

As it is shown at export performance that linear regression had different before and after the implementation of Free Trade. It shows that the present of Free Trade had changed the predicted performance of regression results. Both inflation and exchange rate gave different contribution before and after the implementation on Free Trade. Export of Indonesia shows in the linear regression line that both before and after Free Trade moved from left to right yearly. The line tilt before Free Trade is more steeply than the line tilt after Free Trade. It means the performance of export had leaped much bigger before Free Trade yearly.

Import performance shows that if the exchange rate increased then the import would increase, but after Free Trade, if the exchange rate increase, then the import would decrease. Significant level of correlation (sig. 2 tailed) shows that the inflation rate changed from 0.858 to 0.123 and the significant level of exchange rate correlation (sig. 2 tailed) changed from 0.387 to 0.514. And both numbers are above of 0.025. The implementation of Free Trade contributed a positive impact to Indonesia.

Keywords: Free trade, import, export, inflation, and exchange rate.