Economy fragile at 0.8 percent GDP growth

While some sectors are showing definitive signs of recovery from the global crisis, the domestic economy remains fragile, as GDP grew by 0.8 percent in the third quarter of 2009 from 4.6 percent last year and a revised 0.8 percent in the second quarter.  The decelerated economic growth benefited from Trade, Finance, Mining & Quarrying, Private Services, and Government Services sectors but was adversely affected by the third consecutive quarter of decline in the Manufacturing Sector.

On the demand side, growth came mainly from consumption by both Households and Government and from Merchandise Imports which have mildly recovered from the slump in the first quarter of the year.

The continued inflow of remittances from our overseas workers buttressed the NFIA, which went up by 26.0 percent from 22.6 percent last year, and pushed GNP to grow by 3.5 percent from 6.2 percent in 2008.

The seasonally adjusted estimate of the GDP grew by 1.0 percent lower than the 1.7 percent in the previous quarter.  However, the seasonally adjusted GNP accelerated to 2.2 percent from 1.9 percent in the second quarter of 2009.

On the production side, Services propped up the economy with a 4.0 percent growth, modest but indicating a continuously improving growth since the global financial crisis.  Likewise, AFF posted a lackluster growth of 1.6 percent but industry continues to be dogged by the crisis, declining by 4.4 percent, the lowest since the fourth quarter of 1998.

As population reached an estimated 92.4 million, per capita GDP declined by 1.2 percent from 2.5 percent in the previous year while per capita GNP decelerated to 1.5 percent from 4.2 percent.  On the other hand, Per capita PCE slowed down with a 2.0 percent growth from 2.4 percent.

With the continued demand for the services of our OFWs, Compensation Inflow registered 19.3 percent growth, a slight decrease from last year’s 22.3 percent. Property Income has been posting double-digit declines since Q2 2008 but the decline of 30.7 percent in Q3 2009 is lower than the 43.6 percent decline registered in Q3 2008. On the other hand, Property Expense continued to plummet with a 13.4 percent contraction from negative 8.1 percent last year. As a result, net factor income from abroad grew by 26.0 percent from 22.6 percent in 2008.

At current prices, the per capita GNP now stands at P23,097 or US$479.7 for the third quarter.