GDP growth slows down to 4.6 percent

The Philippine economy has been damaged but not quite ravaged by the global financial turmoil and high oil prices that resulted in a decelerated third quarter GDP growth of 4.6 percent from 7.1 percent.  The decent growth in GDP drew on the strong performances of Manufacturing, Construction and Trade.  On the demand side, household spending led the growth followed by merchandise exports and construction.   The increase both in the stock and employment quality of Filipino residents working abroad drove NFIA to a 24.7 percent growth, from 31.9 percent last year, which propped up GNP by 6.5 percent from 9.1 percent.

The seasonally adjusted estimates of GDP and GNP kept the Philippine economy outside of recession territory as they grew by 0.9 percent and 1.5 percent, respectively, which, however were lower than their second quarter growths.

On the production side, Industry grew at a faster rate of 7.1 percent from 6.6 percent, while decelerated growths were recorded by Services, at 3.7 percent from 8.0 percent, and AFF, at 2.5 percent from 5.7 percent.  In terms of contribution to GDP growth, the Industry sector has outperformed the Services sector for the first time since the fourth quarter of 1997, contributing 2.3 percentage points against 1.9 percentage points.  AFF, on the other hand, contributed a minimal 0.4 percentage point.

Coming from a robust 3.8 percent growth in the second quarter, the seasonally adjusted Agriculture, Fishery and Forestry sector contracted by 0.9 percent this quarter as poor performances of Corn and Other Crops reversed the gains made by Sugarcane, Banana and Palay.  Meanwhile, seasonally adjusted Industry tapered off to 1.1 percent after reaching a peak of 4.8 percent in the last quarter. Manufacturing, Construction and Electricity, Gas and Water kept the sector afloat.  Seasonally adjusted Services sector recovered from a 0.6 percent contraction last quarter to a 1.3 percent increase this quarter as all its sub-sectors registered positive albeit decelerated growths with Ownership of Dwellings and Real Estate, Private Services and Trade contributing the most.

As the country’s population reached an estimated 90.68 million, per capita GDP grew at a decelerated rate of 2.6 percent from 5.0 percent in the previous year while per capita GNP also went up at a lower rate of 4.5 percent from 6.9 percent.  Per capita PCE likewise decelerated at 2.6 percent from 3.6 percent.

Compensation inflow grew by a substantial 25.5 percent, from a marginal 0.4 percent gain last year, and kept NFIA growth robust at 24.7 percent despite the 46.3 percent decline in Property Income.  Meanwhile, Property Expense dropped by 6.7 percent from negative 24.4 percent in the previous year.