Philippine economy surprises with 4.5 percent GDP growth

Despite the global crisis that persisted in the fourth quarter and has spilled into the Year of the Ox, the local economy has not atrophied as fourth quarter GDP grew by a respectable 4.5 percent from 6.4 percent the previous year.  Major growth drivers were Trade, Manufacturing, Agriculture and Fishery, Construction and Private Services.  Major contribution on the demand side came from increased household spending aided by the growths in investment in construction and government consumption.  Meanwhile, the continued double-digit growth in NFIA at 27.9 percent from a minimal 0.6 percent gain last year revved GNP up to 6.4 percent from last year’s 6.0 percent.

The seasonally adjusted estimates of GDP and GNP confirm that the Philippine economy is not completely shielded from the global financial crisis as GDP continued to slow down to 1.0 percent from 1.2 percent expansion in the previous quarter.  The seasonally adjusted GNP likewise grew by a slower rate of 1.3 percent, from the 1.7 percent upturn in the third quarter.

On the production side, the 4.5 percent growth in GDP came from Services, with 2.4 percentage points; Industry, 1.5 percentage points and AFF contributing the least with 0.6 percentage point.  In terms of growth rates, Industry accelerated slightly at 5.0 percent from 4.9 percent, while both AFF and Services sectors decelerated - AFF, from 5.7 to 2.8 percent and Services from 7.8 to 4.9 percent.

On a seasonally adjusted basis, Agriculture, Fishery and Forestry sector rebounded to 1.0 percent after declining by 0.9 percent last quarter mainly due to the double digit growth of Fishery.  From a 1.5 percent expansion in the previous quarter, ebbing exports demand contributed to the 1.3 percent contraction in Industry this quarter, its worst performance since the fourth quarter of 2003.  Services sector accelerated to 2.5 percent from 1.8 percent as three of its sub-sectors registered higher growths than in the two preceding quarters.

The economy continued to keep pace with the population growth in the fourth quarter of 2008 as per capita GDP grew by 2.5 percent from 4.4 percent; per capita GNP by 4.3 percent from 3.9 percent, and per capita PCE by 2.5 percent from 4.1 percent.

NFIA in the fourth quarter greatly accelerated to a 27.9 percent growth from a measly 0.6 percent growth in the same quarter last year as compensation inflow recorded a double-digit growth of 14.1 percent after suffering from a 2.6 percent decline last year.  The exuberant performance of the NFIA was further helped by the 43.0 percent downturn in property expense, which went up by 6.9 percent in the same quarter last year.