NSCB - 4th Quarter 2008 National Accounts - Press Release - GDP SURPRISES WITH 4.5 PERCENT GDP GROWTH in Q4 2008

Fourth Quarter 2008
PHILIPPINE ECONOMY SURPRISES WITH 4.5 PERCENT GDP GROWTH in Q4 2008
Posted 29 January 2009

Chart Despite the global crisis that persisted in the fourth quarter and that 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 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.

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.

On the expenditure side, consumer spending reported a lower growth of 4.5 percent from 6.2 percent a year ago. General government consumption expenditure accelerated slightly to 4.7 percent from 4.6 percent in the same quarter last year. The growth was attributed to the effort made to augment the earnings of government employees.

Investments in Fixed Capital Formation grew by 1.9 percent from last year’s 6.7 percent sustained by investments in construction, which grew by 11.6 percent, a slight deceleration from its 11.7 percent expansion a year ago. Public Construction decelerated to 3.2 percent from 15.4 percent while Private Construction sped up with a 17.8 percent growth from 9.2 percent the previous year. The global financial crisis adversely affected investments in capital formation as Durable Equipment declined by 7.4 percent from a 2.6 percent growth in 2007. Decreased investments were registered in thirteen (13) out of the twenty (20) types of fixed asset investments.

Total Exports went down by 7.5 percent from a 3.9 percent expansion last year largely on account of Merchandise Exports, which contracted by 9.2 percent from a 2.7 percent upturn last year. The following commodities pulled down the growth of Merchandise Exports: Finished Electrical Machinery, which slumped to a double-digit negative growth of 28.5 percent from a 17.2 percent upturn; Semiconductors and Electric Microcircuits, dived to negative 13.2 percent from a growth of 1.7 percent; Garments, which further skidded to negative 11.6 from negative 8.0 percent; Crude Coconut Oil, plunged to negative 16.5 percent from a growth of 28.7 percent; and, Banana and Plantains, negative 11.6 percent from negative 12.7 percent. Meanwhile, Exports of Non-Factor Services contracted by 1.0 percent from a growth of 8.7 percent in the previous year.

Total imports declined by 1.2 percent from a measly 0.2 percent growth the previous year as both Merchandise Imports and Non Merchandise imports recorded negative growths. Total Merchandise Imports posted a 0.5 percent downturn from a negative 0.8 percent growth last year. Growth of the sector was pulled down by the following: Electrical Machinery, Apparatus and Appliances, which declined by 15.1 percent from negative 17.0 percent growth; Machinery other than Electrical Machinery, down by 7.7 percent from a growth of 1.3 percent; Textile Yarns, slipped further to negative 16.3 percent from negative 13.0 percent; Feeding Stuff, reversed its growth from 19.3 percent to negative 10.9 percent; and Fertilizers, down to negative 13.5 percent from a growth of 6.0 percent. Meanwhile, Imports of Non-Factor Services suffered a 9.9 percent downturn from a 12.9 percent upswing a year ago.

Total Exports, valued at P692.1 billion pesos exceeded Total Imports, valued at P658.7 billion pesos at current prices, resulting in a trade surplus of P33.4 billion pesos. The current trade surplus stood at 1.4 percent of GNP from last year’s negative 1.3 percent.

Terms of trade posted a Trade Index of 118.4 percent from 101.6 percent in 2007 while Trading Gain amounted to P25.2 billion pesos.

GNP Implicit Price Index (IPIN) stood at 534.3 percent from 496.2 percent in the previous year or a 7.7 percent growth from 2007.

ROMULO A. VIROLA
Secretary-General, NSCB

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