NSCB - Third Quarter 2007 GNP

Third Quarter 2007
Gross National Product &
Gross Domestic Product by Industrial Origin

Services continue to steer the economy

Services, with a share of 49.4 percent of total GDP, contributed the most to GDP growth by 3.6 percentage points. Leading the sector’s growth were Trade, Private Services, and, Transportation, Communication and Storage.

Transportation, Communication and Storage accelerates

Transportation, Communication and Storage stepped up from 6.1 percent in 2006 to 6.4 percent in the third quarter of 2007. Transport and Storage posted a 6.5 percent growth in the third quarter of 2007 compared to 4.4 percent during the same period last year. Air Transport posted a hefty growth of 26.9 percent in 2007 from a lower growth of 4.6 percent in the previous year brought about by the increased domestic airlines and tourism-related promotion activities. Land Transport grew by 7.8 percent this quarter from 5.5 percent during the same period last year largely due to patronage of MRT, LRT and MEGATREN. Storage and Services Incidental to Transport (SSIT) increased its growth to 6.8 percent from 2.5 percent last year. On the other hand, Water Transport experienced a turnaround from 0.6 percent last year to negative 9.9 percent this year.

Meanwhile, Communication, which contributes 53 percent to the total growth of the sector, posted a lower growth of 6.2 percent this year as compared to the 7.7 percent growth posted last year.

Retail Trade remains brisk

Trade Services accelerated its pace by 8.2 percent in the third quarter of 2007 from 5.5 percent in the same period last year. Retail Trade, which comprises about 77 percent of total Trade, jumped to 10.5 percent from 6.5 percent buoyed by brisk sales from newly opened supermalls. Similarly, Wholesale Trade grew by 1.2 percent albeit slower than the 2.4 percent growth in 2006 mainly driven by increased sales of consumer goods.

Banks and Insurance push Finance’s growth

Financial Services expanded by 7.9 percent in the third quarter of 2007 from 5.5 percent in the previous year. Banks registered a decelerated growth of 5.5 percent as against last year’s growth of 7.7 percent. Non, banks which includes pawnshops, savings and loan associations, mutual and loan associations, credit cooperative activities, and other non-bank financial intermediaries showed signs of recovery as it improved to a lower negative 2.1 percent from negative 5.3 percent in the previous year as a result of higher revenues in loan receivables and borrowings.

Insurance surged to 24.8 percent from 2.3 percent a year ago as a result of higher premiums and investment income.

ODRE decelerates

Ownership of Dwellings and Real Estate (ODRE) registered a lower 6.9 percent in the third quarter of 2007 from 7.6 percent in the previous year. The continued demand for business office spaces from the BPO industry, higher sales of residential properties and increased income from rental and leasing operations from newly opened SuperMalls continued to pull up the growth of Real Estate from 26.2 percent to 21.6 percent. Similarly, Ownership of Dwellings, which accounts for about 71 percent of ODRE, grew by 1.9 percent from 2.4 percent in 2006.

BPO Industry beefs up Private Services

Private Services accelerated to 8.5 percent in the third quarter of 2007, from 6.1 percent in 2006. Business Services (which includes the Business Process Outsourcing (BPO) industry), Hotels and Restaurants, Recreational Services, Medical and Health Services, and Personal services provided the major force to growth. Other contributors were Educational Services and Other Services.

The continued boom and the rapid expansion of the BPO industry in the country hiked the growth of Business Services to 14.4 percent from 10.5 percent last year. Personal Services, which accounted for 21.7 percent of total Private Services, grew at a slower rate of 4.4 percent from 7.9 percent. Hotels and Restaurants accelerated to 11.4 percent from 5.2 percent with the continued strong sales growth of the country’s leading fast food chains. Recreational Services likewise sped up to 9.9 percent from 2.1 percent. Medical and Health Services expanded to 6.5 percent from 3.7 percent. Educational Services rose to 2.4 percent from 2.2 percent. On the other hand Other Services continued to grow albeit at a slower rate of 2.8 percent from 6.8 percent.

Government Services post modest gains

Government services grew by 2.0 percent during the third quarter of 2007 from 4.2 percent in the previous year due to the creation of new teaching positions as well as the hiring of additional policemen and higher provision for personnel entitlements like terminal leaves and pension benefits.

GROSS VALUE ADDED in SERVICES
3rd Quarter 2006 and 3rd Quarter 2007
IN MILLION PESOS

At Constant 1985 Prices

INDUSTRY	Q3 2006	Q3 2007	Growth Rate (%)
SERVICE SECTOR	150,995	161,940	7.2
a. Transport., Comm., Stor.	25,509	27,135	6.4
b. Trade	53,287	57,677	8.2
c. Finance	17,295	18,661	7.9
d. O. Dwellings & R. Estate	15,294	16,353	6.9
e. Private Services	26,498	28,743	8.5
f. Government Services	13,113	13,373	2.0

At Current Prices

INDUSTRY	Q3 2006	Q3 2007	Growth Rate (%)
SERVICE SECTOR	798,545	880,151	10.2
a. Transport., Comm., Stor.	104,329	110,663	6.1
b. Trade	216,548	242,467	12.0
c. Finance	75,637	83,684	10.6
d. O. Dwellings & R. Estate	89,582	96,065	7.2
e. Private Services	206,668	233,527	13.0
f. Government Services	105,780	113,745	7.5

GROSS VALUE ADDED in SERVICES
2005 and 2006
IN MILLION PESOS

INDUSTRY	AT CURRENT PRICES			AT CONSTANT PRICES
INDUSTRY	2005	2006	Growth Rate (%)	2005	2006	Growth Rate (%)
SERVICE SECTOR	2,922,685	3,269,192	11.9	582,616	621,667	6.7
a. Transport., Communication and Storage	413,850	446,224	7.8	104,766	111,412	6.3
b. Trade	776,949	877,544	12.9	203,552	215,960	6.1
c. Finance	263,724	311,953	18.3	64,664	72,009	11.4
d. Occupied Dwellings & Real Estate	320,409	350,676	9.4	56,506	59,734	5.7
e. Private Services	741,984	830,152	11.9	100,373	107,316	6.9
f. Government Services	405,769	452,642	11.6	52,754	55,237	4.7

Source: National Statistical Coordination Board (NSCB)

Posted November 29, 2007.