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Philippines - The Manila Times - Economic Growth Slsows in Third Quarter Print E-mail

Friday, November 30, 2007


Economic growth slows in third quarter

By Darwin G. Amojelar, Reporter

PHILIPPINE economic growth slowed in the third quarter of the year as all major sectors contracted, the government reported Thursday.

Romulo A. Virola, secretary-general of the National Statistical Coordination Board (NSCB), said the economy, as measured by the country’s gross domestic product (GDP), grew 6.6 percent in the third quarter.

This was within the government’s initial estimate of between 6.1 and 6.7 percent.

On a quarter-on-quarter basis, growth however slowed to 0.3 percent in the three-month period ending September, compared with the 1.8-percent expansion in the second quarter.

Virola said the agriculture, fishery and forestry sector expanded by 1.1 percent, lower than the previous quarter’s 2.2 percent.

“The sustained positive growth of the sector was attributed to the steady expansion in fishery, corn and palay during the quarter,” he said.

The industry sector also contracted by 0.7 percent, while the services sector posted a slower growth of 0.6 percent compared with 1 percent the previous quarter. “All subsectors contributed to the growth of the sector led by trade and private services,” Virola said.

Personal consumption spending also slowed to 1 percent quarter-on-quarter from 1.5 percent previously.

“Growth in the earnings of overseas workers, albeit at a reduced rate largely due to [a] rising peso, coupled with low interest rates continue to encourage greater consumer spending,” Virola said.

Government spending, however, rose 8.3 percent in the third quarter owing to continued implementation of infrastructure projects, which was made possible by higher revenue flows.

Socioeconomic Planning Secretary Augusto B. Santos said the 6.6-percent expansion in aggregate output is well within market expectations.

The recent growth performance also compares well with Asian neighbors, he said, adding the Philippines was ahead of Indonesia, which grew 6.5 percent; Hong Kong, 6.2 percent; and South Korea, 5.2 percent. Manila, however, trails China, 11.5 percent; Singapore, 8.9 percent; and Taiwan, 6.9 percent.

The economy’s performance in the third quarter brings the country’s nine-month GDP growth to 7.1 percent.

The government is targeting between 6.1 percent and 6.7 percent for the year.

Santos said with growth spilling into the next quarter on domestic demand, the economy should surpass the projected full-year target. He said there is a big possibility that GDP growth may hit 7 percent this year.

“Barring any sudden changes in the external environment, the economy is set for further strong growth in the fourth quarter of this year. Nonetheless, inflationary pressures arising from the volatility in the oil market must be vigilantly monitored as this may be carried forward and pose downward pressures on future growth prospects,” he said.

(Source: The Manila Times, 2007)

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