Local economy to end year with poor growth
11/26/2009 | 03:44 PM
The Philippine economy will no longer meet the high-end target of the government for the country's growth for the year following the lower-than-expected gross domestic product in the third quarter.
The National Statistical Coordination Board on Thursday said the country's GDP, the sum of all goods and services produced within the country, in July to September was at 0.8 percent, the low-end of the full-year target of growth of between 0.8 percent and 1.8 percent. In the third quarter of 2008, GDP was at 4.6 percent.
The NSCB has also revised downward the second-quarter economic figure from the previously announced 1.5 percent to 0.8 percent, bringing the first half growth at only 0.6 percent and the nine-month growth at 0.7 percent.
“To hit the lower end of the target, the fourth quarter should be (at least) 0.9 percent...Given that the inflation in fourth quarter being quite tempered, strong inflows (from overseas Filipinos), a growth of 0.9 percent in the fourth quarter is quite doable," said Dennis Arroyo, director for national planning and policy staff of the National Economic and Development Authority.
Meanwhile, gross national product, which includes incomes for overseas, expanded 3.5 percent, a decrease from 6.2 percent recorded in the same period last year.
Arroyo added that Christmas spending is also expected to boost the economy in the fourth quarter.
Growth in the third quarter was pulled lower by the sluggish manufacturing output, negating gains from domestic demand, buoyed by steady remittances of overseas Filipinos.
“The decelerated economic growth benefited from Trade, Finance, Mining and Quarrying, Private Services, and Government Services sectors but was adversely affected by the third consecutive quarter of decline in the manufacturing sector," said Romulo Virola, NSCB secretary-general.
Services, which makes up about 60 percent of the economy, grew four percent, an improvement from last year's 3.3 percent. Agriculture, fishery and forestry, which contributes 20 percent, decelerated at 1.6 percent from 2.5 percent.
Industry, about 30 percent of the economy, posted a contraction of 4.4 percent, a slump from a 7.6-percent growth in the third quarter last year.
On the demand side, Personal Consumption Expenditure, which contributes about 70 percent of the economy, jumped four percent from 4.4 percent a year ago.
PCE was mainly supported by the 7.9-percent expansion in government consumption expenditure (GCE).
“Indeed the global crisis is not over, but the worst is over. We have reasons to be more confident. The key growth drivers for 2009 are trade, BPOs, construction, mining and quarrying, and private and government services. Prospects remain bouyant for new markets of our agricultural products, for tourism’s adventure travel, for service quality improvements, for campaign spending till 2010, for growing demand for climate-adaptable production, for renewable energy investments, and for biotechnology applications on food production," said Augusto Santos, acting Socioeconomic Planning Secretary.
For next year, the Philippines will retain its growth forecast of between 2.6 percent and 3.6 percent.
Arroyo said election spending will contribute additional 0.34 percent to the economy, but noted that various risks to growth include drought from the El Nino phenomenon, political violence, weak dollar, inflation, higher oil prices and thinning power supply. - Cheryl M. Arcibal, GMANews.TV
The National Statistical Coordination Board on Thursday said the country's GDP, the sum of all goods and services produced within the country, in July to September was at 0.8 percent, the low-end of the full-year target of growth of between 0.8 percent and 1.8 percent. In the third quarter of 2008, GDP was at 4.6 percent.
The NSCB has also revised downward the second-quarter economic figure from the previously announced 1.5 percent to 0.8 percent, bringing the first half growth at only 0.6 percent and the nine-month growth at 0.7 percent.
“To hit the lower end of the target, the fourth quarter should be (at least) 0.9 percent...Given that the inflation in fourth quarter being quite tempered, strong inflows (from overseas Filipinos), a growth of 0.9 percent in the fourth quarter is quite doable," said Dennis Arroyo, director for national planning and policy staff of the National Economic and Development Authority.
Meanwhile, gross national product, which includes incomes for overseas, expanded 3.5 percent, a decrease from 6.2 percent recorded in the same period last year.
Arroyo added that Christmas spending is also expected to boost the economy in the fourth quarter.
Growth in the third quarter was pulled lower by the sluggish manufacturing output, negating gains from domestic demand, buoyed by steady remittances of overseas Filipinos.
“The decelerated economic growth benefited from Trade, Finance, Mining and Quarrying, Private Services, and Government Services sectors but was adversely affected by the third consecutive quarter of decline in the manufacturing sector," said Romulo Virola, NSCB secretary-general.
Services, which makes up about 60 percent of the economy, grew four percent, an improvement from last year's 3.3 percent. Agriculture, fishery and forestry, which contributes 20 percent, decelerated at 1.6 percent from 2.5 percent.
Industry, about 30 percent of the economy, posted a contraction of 4.4 percent, a slump from a 7.6-percent growth in the third quarter last year.
On the demand side, Personal Consumption Expenditure, which contributes about 70 percent of the economy, jumped four percent from 4.4 percent a year ago.
PCE was mainly supported by the 7.9-percent expansion in government consumption expenditure (GCE).
“Indeed the global crisis is not over, but the worst is over. We have reasons to be more confident. The key growth drivers for 2009 are trade, BPOs, construction, mining and quarrying, and private and government services. Prospects remain bouyant for new markets of our agricultural products, for tourism’s adventure travel, for service quality improvements, for campaign spending till 2010, for growing demand for climate-adaptable production, for renewable energy investments, and for biotechnology applications on food production," said Augusto Santos, acting Socioeconomic Planning Secretary.
For next year, the Philippines will retain its growth forecast of between 2.6 percent and 3.6 percent.
Arroyo said election spending will contribute additional 0.34 percent to the economy, but noted that various risks to growth include drought from the El Nino phenomenon, political violence, weak dollar, inflation, higher oil prices and thinning power supply. - Cheryl M. Arcibal, GMANews.TV
