The country’s over-all economy continued to gain strength in the first half of 2002 as the Gross Domestic Product (GDP) registered a 4.1% growth rate, 1.1 percentage points higher than its 3.0% performance the previous year. The National Statistical Coordination Board (NSCB) figures also show an improvement in the Gross National Product (GNP), from its 3.7% growth in 2001 to an impressive 4.7% expansion this year. As a result, per capita GDP and GNP both reported better growth rates of 1.9% and 2.5% respectively, as compared to its 0.8% and 1.5% gains for the same period last year. 

The Manufacturing industry, which contributed 0.9 percentage point to GDP growth, grew by 3.7% in the first half of 2002 from its 2.9% increment last year. The significant gains on food manufactures and electrical machinery fueled the growth of the sector for the period.  Mining and Quarrying recovered from its negative performance last year, showing a positive14.5% growth. On the other hand, gross value added in construction and utilities sectors declined by 1.2% and 0.7% respectively. The total industry sector managed to improve by 2.9 % against its 1.3 % growth in 2001 and contributed 1.0 percentage point to the total growth of the economy.  

GROSS DOMESTIC PRODUCT
Semestral Growth Rates: 2001-2002

All of the services sub-sectors, except Finance, reported accelerated growths during the first semester of 2002 effecting a notable growth of 5.3% in the Service sector compared to its 4.1% upsurge a year ago. This translates to a 2.4 percentage points contribution to the growth of GDP for the semester. Trade and Transportation, Communication and Storage (TCS) continued as the major contributors in sustaining the growth of the economy. TCS posted 9.8% increase from its 8.6% growth in 2001 while Trade sub-sector grew by  5.9%, compared to its 5.0% gain last year. The combined Trade and TCS contributed 1.6 percentage points to the GDP growth. Ownership of Dwellings and Real Estate (ODRE) posted a turnaround growth of 1.6% from its 1.6% decline a year ago. Furthermore, Private and Government services accelerated to 5.0% and 4.2%, respectively. Meanwhile, Finance sub-sector decelerated from 2.4% increment in 2001 to its modest 1.8% growth this year as a result of the deceleration in both the banks and non-banks activities.

The combined AFF sector contributed 0.7 percentage point to the GDP growth during the first half of the year. Even with a decelerated growth of 2.4% in the second quarter of 2002 from a 3.6% gain the previous year, the combined AFF sector surpassed its 3.3% performance in the first semester of 2001 with a 3.5% gain this year. Almost all the AFF sub-sectors, except for corn (-1.0%) and coconut (-2.2%), posted favorable growths in the first semester of 2002.

Net Factor Income from Abroad (NFIA) continued to grow although at a decelerated pace of 14.0% during the first half of the year from 16.0% in 2001.  Growth in NFIA was brought about by the increase in deployment for both land-based and sea-based workers and lower interest payments during the period. NFIA accounts for about 6.8% of total GNP and contributed 0.9 percentage point to the 4.7% growth of GNP

On the demand side, Personal Consumption Expenditure continued to account for the biggest share in the GDP growth putting in 2.8 percentage points.  PCE registered a 3.6% expansion, slightly higher than its 3.4% growth a year ago, spurred by the increased expenditures on food, transportation and communication and miscellaneous services.

Meanwhile, expenditures on investment suffered slightly with a 0.4 % contraction, due mainly to the 2.8% drop in the Durable equipment.  Construction and Breeding stocks gained momentum growing by 1.3% and 3.6% respectively.

Exports and imports of goods started to show indications of recovery in the first half of the year. Merchandise exports reported a 3.9 % growth rate during the first semester, higher than its 2.8% performance the same period last year while merchandise imports inched up a bit with 0.2% growth rate. On a quarterly basis, both merchandise exports and imports posted favorable growths in the second quarter with 10.5% and 6.0% upsurge respectively.  Semiconductor, the top export of the country, posted a 5.5 % increase during the semester from its negative 16.7 % performance last year. It recovered tremendously in the second quarter with 20.1% growth rate after posting five consecutive negative quarterly growths. Similarly, Finished Electrical Machinery recovered from its negative streak with second quarter growth of 21.4% and a semestral performance of 7.3 %. Nine (9) out of 15 merchandise imports exhibited positive growths led by Electrical machinery, the second highest import commodity, which grew by 19.6 %. Electrical machinery proved to be the highest gainer in the semester posting a 2.3 % share to the growth of merchandise imports.

Meanwhile export and import of non-factor services continued their negative streak posting declines of 12.5% and 24.4% respectively. Total exports expanded by 1.4% from its 0.4% upsurge in 2001 while total imports still posted a negative growth of 1.8% against the 5.6% gain in 2001.

Government consumption expenditure manifested a zero growth during the first semester, a more sluggish performance compared to its 1.2% increment a year ago.

PRESS CONFERENCE
on the
1st Semester 2002 Philippine Economy
29 August 2002, 10 AM
National Statistical Coordination Board
Makati City, Philippines

(from left:  OIC Dir. Ray J. Talento, NSCB; Asst. Sec. Gen. Estrella V. Domingo, NSCB;   Dir. Gen.  Dante B. Canlas, NEDA and Dir. Socorro V. Zingapan, NPPS-NEDA)