NSCB - Second Quarter 2005 GNP

Second Quarter 2005
Gross National Product &
Gross Domestic Product by Industrial Origin

Services

Services, with a share of 48.9 percent or nearly-half of total GDP, continued to lead the economy, contributing 2.93 percentage points. All sub-sectors of Services, however, reported lower growths in the second quarter of 2005 except Finance which accelerated to a double-digit growth. Carrying the sector’s growth were Trade, Transportation, Communication and Storage (TCS), and Finance.

Transportation, Communication and Storage

Transportation, Communication and Storage, slowed down to 9.7 percent in the second quarter of 2005, from 14.6 percent in the previous year.

Communications, which remained as the major force in the industry’s growth, slightly decelerated to 15.9 percent during the quarter from 16.6 percent registered in 2004. Mobile telephone service providers continued to post expansions during the quarter, boosted by the steady growth in the cellular subscribers base. Services were focused on introducing innovations and creating products that are attractive and affordable to the mass-market consumers.

Land Transport diminished its growth to 0.5 percent from a high of 12.1 percent a year ago, as the sub-sector was greatly affected by the land transport fare hike. Water Transport turned in a miniscule growth of 0.4 percent from 28.0 percent, due to the reduced volume of passengers and cargo throughput at the waterfronts. Similarly, Air Transport grew by 4.2 percent compared to the 20.4 percent growth in 2004 due to the reduced number of domestic flights. Meanwhile, SSIT soared to 26.3 percent from 2.2 percent due to the significant rise in revenue from tollway operations during the period.

Trade

Trade Services continued to grow by 5.6 percent in the second quarter of 2005 from 6.7 percent in the previous year. Retail Trade, which accounted for about 75.4 percent of total Trade, slowed down to 5.8 percent from 6.8 percent in 2004. Meanwhile, Wholesale Trade rose by 5.1 percent from 6.3 percent a year ago, brought about by higher sales of petroleum products and processed food.

Finance

Financial Services strengthened its growth to 10.5 percent in the second quarter of 2005 from 9.6 percent in 2004. The bullish performance of the sector was driven by Banks, which accelerated to 11.3 percent from 10.5 percent last year, buoyed by the continued upsurge in both interest and non-interest income. Similarly, Non-banks stepped up its growth to 10.4 percent from 7.4 percent in 2004. On the other hand, Insurance grew at a lower rate of 7.4 percent from 7.6 percent in 2004.

Ownership of Dwellings and Real Estate (ODRE)

Ownership of Dwellings and Real Estate (ODRE) continued to grow at a slower pace of 4.6 percent in the second quarter of 2005 from 6.4 percent reported in the previous year. Higher demand for office spaces due to more call centers, medical transcription and business outsourcing companies pushed up real estate to 11.8 percent from 22.8 percent in the previous year. On the other hand, Ownership of Dwellings, which accounts for about 78.7 percent of ODRE, posted a slightly lower growth of 2.8 percent from 2.9 percent in the same period last year.

Private Services

Private Services decelerated to 5.3 percent in the second quarter of 2005, from 6.9 percent in 2004, dragged by the slowdown in majority of the subsectors and the continued decline in Educational Services. Leading contributors to growth during the quarter were Medical and Health Services, Personal Services, Recreational Services and Business Services.

Medical and Health services stood at the forefront of Services as its growth surged to 10.5 percent from 7.4 percent in the previous year. Personal Services, which include laundry services, spas, beauty parlors, and other related services rose by 5.3 percent from the 5.8 percent growth a year ago. Recreational Services went up by 8.2 percent, slightly lower than the 8.7 percent recorded in 2004. Business services, (which include the call centers, labor recruitment services, advertising services, among others), grew by 6.0 percent from 9.0 percent. Other subsectors that posted slower growths during the quarter were Hotels and Restaurants and Other Private Services.

Educational Services, on the other hand, continued to decline by 1.3 percent from positive 4.6 percent in the previous year, an ominous sign for the human capital of the country.

Government Services

As the government continued to implement its program of controlled spending, government services decreased by 1.4 percent during the quarter from 4.1 percent in 2004.

GROSS VALUE ADDED in SERVICES
2nd Quarter 2005 and 2nd Quarter 2004
AT CONSTANT 1985 PRICES, IN MILLION PESOS

INDUSTRY/INDUSTRY GROUP	2nd Qtr 2005	2nd Qtr 2004	Growth Rate (%)
TOTAL SERVICE	143,706	135,498	6.1
a. Transportation, Communication & Storage	27,814	25,347	9.7
b. Trade	49,157	46,552	5.6
c. Finance	16,583	15,013	10.5
d. Ownership of Dwellings & Real Estate	14,168	13,549	4.6
e. Private Services	22,584	21,442	5.3
f. Government Services	13,399	13,595	-1.4

Source: National Statistical Coordination Board (NSCB)

Posted 29 August 2005.


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