NSCB - 4th Quarter 2006 National Accounts

Fourth Quarter 2006
Gross National Product &
Gross Domestic Product by Industrial Origin

Resilient Services continues to drive the economy

Services, with a share of 48.0 percent of total GDP, contributed the most to GDP growth with 3.3 percentage points. Major contributors to the sector’s growth were Trade, Transportation, Communication and Storage and Private Services.

Communication and Land transport hike TCS growth

Transportation, Communication and Storage accelerated its pace to 8.0 percent in the fourth quarter of 2006 from 7.3 percent.

Communications, the leading contributor to TCS growth, registered a lower growth of 6.7 percent from 15.2 percent in the previous year. The sustained value-based promotions of wireless service providers strengthened price competitiveness among the players and resulted in subscriber base growth and further increased usage of mobile phone services.

Land Transport bounced back to a substantial growth of 13.7 percent from negative 5.8 percent in the previous year with the increased passenger patronage and freight for road transport. Water Transport further slipped to negative 5.5 from negative 1.6 percent. Meanwhile, Air Transport grew by 6.2 percent from 8.6 percent in the previous year, with the continued value fare offerings and vigorous promotions of domestic airlines. Storage and Services Incidental to Transport (SSIT), meanwhile, posted a diminished growth of 4.8 percent from its hefty growth of 11.5 percent a year ago as the growth in the number of ship calls in the country’s port terminals was weighed down by the decline in both the volume of passenger traffic and cargo-through-put.

Retail Trade backs Total Trade

Trade Services slightly accelerated its pace to 6.1 percent in the fourth quarter of 2006, from 5.9 percent in the previous year. Retail Trade, which comprises the bulk of total Trade, accelerated to 6.6 percent from 5.9 percent shored up by brisk sales from the newly opened supermalls. Wholesale Trade, on the other hand, recorded a slower growth of 4.3 percent from 6.0 percent in 2005, largely boosted by higher sales of petroleum and pharmaceutical products.

Non-banks and Insurance push Finance’s growth

Financial Services continued to grow albeit at a slower pace of 8.3 percent in the fourth quarter of 2006 from 11.5 percent in the previous year. Banks registered a diminished growth of 9.0 percent compared to last year’s robust growth of 21.3 percent with lower gains from interest income and non-interest income. Non-banks, which include financial services from investment companies, security dealers, brokers and pawnshops, rebounded to a substantial growth of 7.8 percent from negative 4.0 percent in the previous year as a result of higher utilization of financial services. Meanwhile, Insurance continued to recover since the first quarter of 2006 as it grew by 5.7 percent from negative 10.0 percent in 2005.

Real Estate continues to expand

Ownership of Dwellings and Real Estate (ODRE) continued to grow by 6.7 percent in the fourth quarter of 2006 from 6.9 percent in the previous year. Higher sales from residential projects by OFWs, the sustained demand for business office spaces from the BPO industry and increased income from rental and leasing operations from newly opened SuperMalls strengthened the growth of Real Estate from 21.9 percent to 22.7 percent. On the other hand, Ownership of Dwellings, which accounts for about 73 percent of ODRE, grew by 1.9 percent from 3.1 percent in 2005. This was the lowest growth recorded since Q1 2001 as the strong typhoons that hit the country in the fourth quarter wrought destruction to thousands of dwellings.

BPO Industry drives growth of Private Services

Private Services accelerated to 8.3 percent in the fourth quarter of 2006, from 5.7 percent in 2005. Business Services, (which includes the Business Process Outsourcing (BPO) industry), Personal Services, Hotels and Restaurants and Recreational Services provided the major impetus to the sector’s growth.

The continued expansion of the Business Processing Outsourcing (BPO) industry in the country propelled the growth of Business Services to 17.7 percent from 11.4 percent. Personal Services, which include laundry services, spas, beauty parlors and other related services climbed by 9.4 percent from the 6.8 percent growth in 2005. Hotels and Restaurants more than doubled its growth to 6.9 percent from 3.0 percent while Recreational Services rose by 5.0 percent from 1.8 percent. Educational Services, maintained its growth of 3.3 percent in the previous year. Meanwhile, Other sub-sectors registered slower growths during the quarter: Medical and Health Services, which grew by 4.1 percent from 6.0 percent; and Other Services, up by 2.1 percent from 3.4 percent.

Government Services grows faster

Government services grew at a faster rate of 5.2 percent during the fourth quarter 2006 from 1.2 percent in the previous year due to exemptions in hiring and the provision of additional incentives to government personnel.

GROSS VALUE ADDED in SERVICES
4th Quarter 2005 and 4th Quarter 2006
AT CONSTANT 1985 PRICES, IN MILLION PESOS

INDUSTRY/INDUSTRY GROUP	4th Qtr 2005	4th Qtr 2006	Growth Rate (%)
TOTAL SERVICE	157,939	169,005	7.0
a. Transportation, Communication & Storage	28,904	31,215	8.0
b. Trade	59,489	63,090	6.1
c. Finance	16,410	17,773	8.3
d. Ownership of Dwellings & Real Estate	14,256	15,212	6.7
e. Private Services	26,078	28,244	8.3
f. Government Services	12,802	13,472	5.2

GROSS VALUE ADDED in SERVICES
Annual 2005 and 2006
AT CONSTANT 1985 PRICES, IN MILLION PESOS

INDUSTRY/INDUSTRY GROUP	2005	2006	Growth Rate (%)
TOTAL SERVICE	579,635	616,049	6.3
a. Transportation, Communication & Storage	104,650	111,681	6.7
b. Trade	203,552	214,744	5.5
c. Finance	64,664	70,811	9.5
d. Ownership of Dwellings & Real Estate	56,528	59,801	5.8
e. Private Services	98,043	104,755	6.8
f. Government Services	52,198	54,257	3.9

Source: National Statistical Coordination Board (NSCB)

Posted 31 January 2007.


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