PH economy grows 4.9 percent in first quarter

Modest government spending and a slowdown in global trade stunted growth of the country's gross domestic product (GDP) in the first quarter of 2011, bringing the now 2000-based growth rate for the period at 4.9 percent, the National Statistical Coordination Board (NSCB) said on Monday. The industry sector led other sectoral groups in contributing a robust 7.2 percent growth to the GDP for the quarter, on the back of the strong performance of the manufacturing sector supported by the mining and quarrying and construction industries. GDP is the amount of goods and services produced by a country in a given period. "On the demand side, the growth came mainly from increased investments in fixed capital formation particularly durable equipment and Household spending," said Romulo Virola, secretary-general of the NSCB. Declining expenditures Household spending grew by 4.9 percent, the NSCB said, as fixed capital formation recorded a 12 percent growth in the period. Government expenditures fell sharply by 17.2 percent in the quarter as public sector disbursements, particulary for PPP projects, were delayed for the period. Underspending by the government particularly contributed to the lowered business confidence index for the second straight quarter, the Bangko Sentral ng Pilipinas reported earier. Exports of services experienced the largest decline in growth for the period, falling 19.5 percent from year-ago figures while exports of goods grew by 10.1 percent. Imports of services, meanwhile, fell by 6.6 percent for the first quarter of the year, as total imports registered a modest growth of 8.8 percent. Total exports, on the other hand, slowed to a meager 3.3 percent growth for the quarter. The NSCB report added that the political crisis in the Middle East and North Africa region constricted the country's Net Primary Income as it posts zero growth during the quarter. This resulted in the slowdown in the growth of the Gross National Income (GNI), pegged at 3.6 percent, down from 11.5 percent in the same period in 2010. Sectoral growth The Agriculture and Forestry sector rebounded to 4.2 percent in the period bolstered by the recovery of palay, sugarcane and corn. Other crops such as coconut, mango, pineapple and coffee suffered declines in the period due to decreased production, among other factors. The services sector, on the other hand, grew by 3.7 percent, buoyed by marked improvements in other services (6.8 percent), real estate, renting and business activity (5.9 percent) and transportation, storage and communication (5.5 percent) industries. Private construction investments, meanwhile, scored a double-digit growth of 21.6 percent for the period, coming from an 11.9 percent growth rate year-on-year. Public construction, however, went down by a sharp 37.3 percent, pulling down the total Construction growth rate to a mere 7.2 percent. The country's GNI per capita, with a projected population reaching 95.1 million for the period, is pegged at 1.7 percent, while per-capita GDP settled at 2.9 percent. Per capita GNI is the value of a country’s goods and services in a given period, divided by its population. -- JM Tuazon/CMA/OMG, GMA News