The recovery of the global economy from the crisis, notwithstanding the double whammies whacked by Ondoy and Pepeng, paved the way for a GDP growth of 1.8 percent in the fourth quarter of 2009, bringing the full year GDP growth to 0.9 percent from 3.8 percent in 2008. Contributing to the tepid rejuvenation of the domestic economy in the fourth quarter are the double digit growth in retail trade, Banks & Non Banks, recreational Services and Mining & Quarrying as well as the recovery of the Manufacturing sector that offset the decline by 2.8 percent of AFF.  On the demand side, increased consumer and especially government spending for the whole year made up for the diminished investments in durable equipment and sustained decline in the exports demand from our recession-stricken major trading partners.

Meanwhile, on an annual basis, GNP grew at a slower rate of 3.0 percent from 6.2 percent last year in spite of the 20.1 percent growth in NFIA from 30.8 percent last year

For the fourth quarter, the continuing, though much decelerated demand for the services of our OFW’s caused NFIA to grow by 7.5 percent from 51.2 percent last year, pushing GNP growth to 2.4 percent from last year’s 6.7 percent.

The seasonally adjusted estimates of GDP and GNP confirm that the Philippine economy has recovered from the global financial crisis as GDP inched up to 0.9 percent from 0.8 percent in the previous quarter.

Meanwhile, the seasonally adjusted GNP sustained its 1.4 percent growth in the third quarter.

For the 4th quarter of 2009, Services showed new signs of vigor, accelerating by 4.2 percent from 1.3 percent while Industry recovered from 3 consecutive quarters of decline, growing by 1.1 percent from 5.3 percent.  However, Ondoy and Pepeng caused AFF to decline by 2.8 percent from 2.9 percent growth last year.

The seasonally adjusted Agriculture, Fishery and Forestry sector declined by 3.3 percent from a 0.8 percent growth in the previous quarter largely due to the decline in Palay which of course suffered greatly from Ondoy and Pepeng.  On the other hand, Industry rebounded to a 3.7 percent growth from a 0.4 percent decline in the previous quarter due to the expansion of Manufacturing and Mining & Quarrying.  Services sector, however, decelerated to 0.7 percent from 1.5 percent.

The domestic economy could not keep pace with the population growth in 2009 as per capita GDP declined by 1.0 percent from a 1.8 percent growth in 2008. However, per capita GNP continues to grow by 1.0 percent from 4.1 percent, as well as per capita PCE, by 1.8 percent from 2.6 percent.

Compensation inflow of the country’s OFWs in 2009 was US$ 25.9 billion, averaging more than US$ 2B a month, a 15.6 percent increase over last year’s US$ 22.4 billion.

On the expenditure side, consumer spending accelerated slightly to 5.1 percent in the fourth quarter of 2009 from 5.0 percent the same period last year.  Government Consumption Expenditure (GCE) posted a double-digit growth of 12.1 percent from 2.6 percent last year due to the disbursement of funds for relief and rehabilitation of areas affected by tropical storms Ondoy and Pepeng as well as continued release of funds for the automated 2010 elections.

Investments in Fixed Capital Formation went down by 1.6 percent from last year’s meager growth of 0.1 percent as a result of poor investments in all of its sub sectors.  Investments in Construction declined by 2.9 percent from a growth of 8.2 percent while investments in Durable Equipment dropped by 0.1 percent from negative 7.9 percent in 2008. 

Total Exports went down by 10.0 percent from the negative 11.5 percent growth registered in the fourth quarter of the previous year as both Merchandise Exports and Non Merchandise Exports suffered reversals in growth.

Total imports went down by 2.5 percent from a growth of 5.0 percent in the previous year, as both Merchandise Imports and Non Merchandise imports continued to decline.

The terms of trade during the quarter posted a Trade Index of 135.8 percent from 121.5 percent in 2008.  Trading Gain for the quarter amounted to P43.7 billion pesos.

GNP Implicit Price Index (IPIN) stood at 551.9 percent from 530.0 percent in the previous year or 4.1 percent inflation.

ROMULO A. VIROLA
Secretary-General, NSCB