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Press Release
The Leading Economic Indicator (LEI) continues its descent in Q4 2008 
(PR-200811-ES4-07, Posted 04 November 2008)
The composite leading economic indicator (LEI) dropped further in the fourth quarter of 2008, to 0.102 from 0.269 in the third quarter of 2008 signifying a slowdown in the country’s economic performance for the period under review.
Figure 1 below shows the direction of the composite LEI vis-à-vis the movement of the cycle component of the reference series - the Non-Agriculture GVA.
Figure 1. Composite leading economic indicator (LEI) versus
the Non-Agriculture GVA cycle: Q3 1985 to Q4 2008
Of the eleven indicators that make up the composite LEI, only two contributed positively to the LEI for the fourth quarter of 2008, and these were electric energy consumption and wholesale price index. The negative contributors - beginning with the largest negative contributor – were, stock price index, total merchandise imports, foreign exchange rate, new businesses, hotel occupancy rate, money supply, tourist arrivals, consumer price index, and terms of trade index
Positive contributors accounted for a meager 5.6 percent of total contribution, while negative contributors posted a substantial 94.4 percent share. The fourth quarter share of the positive contributors dropped considerably by 29.4 percentage points, from the 35.0 percent share computed in the third quarter 2008 LEI.
Table 1 highlights the composite LEI estimates and the corresponding slopes for the most recent years - first quarter 2001 to fourth quarter 2008.
Table 1: Composite Leading Economic Indicator (LEI)
First Quarter 2001 to Fourth Quarter 2008
| Period | Composite LEI | Slope |
2001 Q1 |
(0.037) |
(0.102) |
Q2 |
(0.101) |
(0.064) |
Q3 |
(0.175) |
(0.074) |
Q4 |
(0.334) |
(0.160) |
2002 Q1 |
(0.424) |
(0.090) |
Q2 |
(0.274) |
0.149 |
Q3 |
(0.053) |
0.221 |
Q4 |
0.003 |
0.057 |
2003 Q1 |
(0.080) |
(0.083) |
Q2 |
(0.189) |
(0.110) |
Q3 |
(0.194) |
(0.005) |
Q4 |
(0.076) |
0.118 |
2004 Q1 |
0.045 |
0.121 |
Q2 |
0.017 |
(0.028) |
Q3 |
(0.075) |
(0.091) |
Q4 |
(0.113) |
(0.038) |
2005 Q1 |
(0.095) |
0.018 |
Q2 |
(0.053) |
0.043 |
Q3 |
(0.044) |
0.009 |
Q4 |
(0.085) |
(0.042) |
2006 Q1 |
(0.170) |
(0.085) |
Q2 |
(0.192) |
(0.022) |
Q3 |
(0.159) |
0.033 |
Q4 |
(0.114) |
0.045 |
2007 Q1 |
(0.060) |
0.054 |
Q2 |
0.012 |
0.072 |
Q3 |
0.095 |
0.083 |
Q4 |
0.246 |
0.151 |
2008 Q1 |
0.415 |
0.169 |
Q2 |
0.437 |
0.022 |
Q3 |
0.269 |
(0.168) |
Q4 |
0.102 |
(0.167) |
The contribution of each of the eleven (11) indicators is measured through the combined effects of the: 1) direction (the slope or change) of the cycle component of each of the indicators; and 2) correlation of their cycle components with that of the GDP for industry and services.
Details of the LEI computation procedure, information about the component leading indicators, and limitations on the methodology and latest data are available at http://www.nscb.gov.ph/lei under the Technical Notes section.
ROMULO A. VIROLA
Secretary General
Contact Persons:
Regina S. Reyes and Josephine P. Ferre
Tel. No.: (+6 32) 895-5002; (+6 32) 896-7981
E-mail: rs.reyes@nscb.gov.ph ; jr.penaflor@nscb.gov.ph
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