The Philippine domestic economy resiliently withstood the combined effects of the El Niño, the SARS outbreak, the war in Iraq, the Oakwood Mutiny, the recurring peace and order problems, and political instability, as the country’s Gross Domestic Product (GDP) grew by 4.5 percent in 2003, from 4.4 percent in 2002. The robust growth of 18.9 percent in Net Factor Income from Abroad (NFIA) further shored up the economy, pushing the growth of the Gross National Product (GNP) upward to 5.5 percent, from 4.5 percent registered a year ago.

On the production side, two of the three major sectors posted accelerated growths during the year. Agriculture, Fishery and Forestry grew by 3.9 percent from 3.3 percent and Services by 5.9 percent, from 5.4 percent in 2002. On the other hand, Industry’s performance paced down to a growth of 3.0 percent, from 3.7 percent in the previous year.

The continued expansion of the economy in 2003 translated to an improved growth of 2.1 percent in the real per capita GDP, from the 2.0 percent growth recorded in 2002. Meanwhile, per capita GNP inched up by 3.1 percent from a growth of 2.1 percent last year. Correspondingly, the accelerated growth in GNP translated to the per capita PCE increasing to 2.7 percent, from 1.7 percent in 2002.

The Net Factor Income from Abroad (NFIA) continued to gain headway as the compensation inflow rose by 6.9 percent in 2003 as a result of the 4.9 percent increase in the $-P conversion, despite the decline in the stock of OFWs by year-end of 2003. With the substantial decline in property expense of 11.2 percent and the hike in property income by 7.9 percent, this translated to the higher net factor income flows during the year.