NSCB - Fourth Quarter 2005 GNP

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

Services continues to propel and increase its share of the economy

Services, with a share of 46.8 percent of total GDP, contributed the most to GDP growth with 3.11 percentage points. Leading the sector’s growth were Trade, Finance and Transport, Communication and Storage.

Oil and transport fare fike adversely affects Land and Water Transport

Transportation, Communication and Storage reflected a marked reduction in growth from 9.6 percent in the previous year to 6.6 percent in the fourth quarter of 2005.

Growth of the sector was mainly driven by Communications, which grew by 15.1 percent from 15.4 percent in 2004 as mobile and landline telephone service providers continued to post gains from their various pricing promotion schemes and the launching of international remittance and reload services.

Land Transport plunged to negative 7.2 percent from a growth of 1.5 percent a year ago, as the sub-sector was adversely hit by the repeated spikes in oil prices and the increased transport fare which took effect in the second quarter. Water Transport, likewise slipped to negative 1.8 percent from a substantial growth of 8.3 percent, due to the decline in the volume of passengers and cargo throughput at the waterfronts. On the other hand, Air Transport accelerated to 7.5 percent from 6.3 percent in the previous year, boosted by the travel-related activities of the Southeast Asian Games held in November and other tourism promotion activities.

Retailing activities boost the Trade industry

Trade Services accelerated to 6.2 percent in the fourth quarter of 2005, surpassing its growth of 5.8 percent in the same period last year. Retail Trade, which accounts for about three-fourths of total Trade, grew by 6.2 percent from 6.5 percent in 2004. Wholesale Trade, likewise strengthened the performance of the sector, posting a higher growth of 6.5 percent from 3.6 percent in 2004, shored up by higher sales of pharmaceutical products, petroleum products and supermarkets.

Banks spur Finance’s double-digit growth

Financial Services continued its strong performance with 18.4 percent in the fourth quarter of 2005 from 8.0 percent in 2004. The vigorous performance of the sector was mainly driven by Banks, which grew by 26.6 percent from 7.7 percent in the previous year, due to the upsurge in non-interest income such as trading gains from government securities. Non-banks, on the other hand, picked up to 11.0 percent from 8.1 percent in 2004. Meanwhile, Insurance declined by 2.3 percent from 8.9 percent in 2004 as the embattled pre-need industry continued to suffer financial difficulties during the period.

Strong demand for office spaces from the Call Center industry boosts Real Estate

Ownership of Dwellings and Real Estate (ODRE) accelerated to 5.5 percent in the fourth quarter of 2005 from 3.9 percent in the previous year. Increased sales from residential projects and higher income from rental and leasing operations (specially from the call center industry) contributed significantly to the robust growth of Real Estate at 14.7 percent from 8.2 percent in the previous year. On the other hand, Ownership of Dwellings, which accounts for about 78 percent of ODRE, posted an improved growth of 3.1 percent from 2.8 percent in 2004.

Private Services slows down

Private Services continued to decelerate at 4.9 percent in the fourth quarter of 2005, from 6.5 percent in the 2004, as five out of seven sub-sectors reflected lower growths during the period. Only Personal services and Other services registered accelerated growths of 6.2 percent from 5.2 percent and 4.3 percent from 1.9 percent, respectively.

The Southeast Asian Games held in November boosted Recreational services and Hotel and Restaurants during the period, as they posted growths of 4.5 percent from 8.6 percent and 3.0 percent from 6.8 percent, respectively

Other sub-sectors that reported slower growths during the quarter were: Educational services, which grew by 2.8 percent from 6.4 percent; Medical and Health services, up by 5.9 percent from 6.9 percent last year; and Business services, up by 6.6 percent from 7.4 percent last year.

Tight fiscal measures restrict growth of Government Services

As the government continued to practise fiscal discipline to contain the budget deficit, growth of government services remained restricted at 0.1 percent during the quarter from a negative growth of 1.8 percent in 2004.

GROSS VALUE ADDED in SERVICES
4th Quarter 2005 and 4th Quarter 2004
AT CONSTANT 1985 PRICES, IN MILLION PESOS

INDUSTRY/INDUSTRY GROUP	4th Qtr 2005	4th Qtr 2004	Growth Rate (%)
TOTAL SERVICE	157,177	147,307	6.7
a. Transportation, Communication & Storage	28,706	26,928	6.6
b. Trade	59,660	56,153	6.2
c. Finance	17,381	14,682	18.4
d. Ownership of Dwellings & Real Estate	14,062	13,334	5.5
e. Private Services	24,459	23,308	4.9
f. Government Services	12,909	12,901	0.1

Source: National Statistical Coordination Board (NSCB)

Posted 30 January 2006.