An Analysis on the Competitiveness of the Philippine Furniture Industry relative to ASEAN
Fe Lea V. Ajesta, Franc Anthony C. Figura, and Andrea Mystica D. Vicente

Revealed Comparative Advantage
Revealed Comparative Advantage (RCA) is a commonly accepted index of trade competitiveness. It is based on the theory that a country would specialize on commodities in which it has comparative advantage. There is comparative advantage in producing a commodity when the relative cost of producing that commodity in the country is lower than a reference country group. A country is said to have comparative advantage in a commodity when the RCA index exceeds one. If not, then it is said to have comparative disadvantage.
Presented in Table 1 are the RCA indices of the Philippine furniture industry relative to ASEAN when it comes to exporting within the region. From the data, it can be seen that the Philippines is not specializing in producing furniture for exports. In other words, there are not a lot of investments going into furniture compared to other commodities in the Philippines (e.g., electronics, mineral fuels).
Furniture only has a small share in total Philippine exports whereas it has a larger share in the total exports of other ASEAN countries. However, it can be noticed that there is specialization on seats when it comes to exporting within the ASEAN region as seen in its RCA indices. In addition, it can be observed that seats have started becoming more competitive in the region as seen in the increasing indices from the years 2011-2013.

Table 1. Revealed Comparative Advantage of the PH furniture industry in ASEAN
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Seats
0.82 1.60 1.49 1.61 0.99 1.46 1.83 1.51 1.23 1.70 3.50 2.52
Other

0.14

0.13

0.18

0.19

0.25

0.23

0.32

0.24

0.12

0.16

0.18

0.37