Amid the backdrop of the unexpected turnover of political power, the Philippine economy grew at a slower pace for the first quarter of 2001 compared to the same period last year. According to the National Accounts estimates of the National Statistical Coordination Board (NSCB), Gross Domestic Product (GDP) grew by 2.5% during the first quarter of 2001, slowing down from the previous year’s 3.3% growth. Gross National Product (GNP) however improved slightly from 3.5% in Q1 2000 to 3.6% in Q1 2001. 

          All three major economic activities posted positive growth for the quarter with Services expanding by 4.5% compared to 4.0% for the same period last year. Growth of the combined Agriculture, Fishery & Forestry (AFF) sector improved almost six-fold from 0.4% during Q1 2000 to 2.3% in Q1 2001. On the other hand, it was a listless quarter for Industry as it posted a marginal 0.1% growth for the quarter compared to 4.4% the year before.

          Aggregate Services was the biggest contributor to GDP growth, accounting for 2.0 percentage points of the 2.5 GDP growth. Boosted by brisk sales of campaign materials for the May 14 elections, the Wholesale & Retail Trade sub-sector led all contributors to GDP growth for the first quarter of 2001 as it grew by 5.6%. The combined Transportation, Communication & Storage (TCS) sub-sector posted accelerated growth for the quarter, at 10.4 percent, up from the previous year’s 7.3 percent. All Services sub-sectors except one posted positive and accelerated growth for the quarter.

          The 2.5% expansion of the Agriculture Industry for the first quarter of this year gave AFF an overall growth of 2.3%. Among the sub-sectors under AFF, only Palay production and Forestry contracted for the period.

          For Industry, Utilities was the only sub-sector to pick up speed, accelerating from 4.5% to 6.2%. Manufacturing continued to slow down as it posted 2.4% growth for Q1 2001, down from 6.0% a year earlier. Two Industry sub-sectors pulled down overall Industry growth by posting double-digit declines for the quarter. Construction more than doubled its decline while Mining & Quarrying went from double-digit growth for Q1 2000 to a double-digit decline for Q1 2001.

          On the expenditure side, Imports outpaced Exports during Q1 2001 by registering a hefty 23.9% expansion, with Merchandise Imports growing by a formidable 29.4%. Export growth however continued its double-digit streak, at 19.0%, mainly due to the large growth in Merchandise Exports. Semiconductors remained among the country’s top exports even as it declined by 1.3%.