Economy ekes out 0.8% growth in Q3

MANILA, Philippines – The economy, as measured by the country’s gross domestic product (GDP), grew by a meager 0.8 percent in the third quarter of the year from 4.6 percent recorded a year ago and slower than the official forecast range for the period of 1.6 percent to 2.6 percent, the National Statistical Coordination Board (NSCB) reported yesterday.

NSCB secretary-general Romulo Virola said a decline in the manufacturing sector and sluggish farm output curbed economic growth in the July to September period.

On a seasonally adjusted basis, GDP grew by one percent, lower than the 1.7 percent recorded in the previous quarter.

GDP is the sum of goods and services produced in a country in a given period.

Virola said the economy remains “fragile” even as some sectors are showing definitive signs of recovery.

As population reached an estimated 92.4 million, per capita GDP declined by 1.2 percent from 2.5 percent in the previous year, the NSCB said.

By sector, agriculture grew by 1.6 percent while the services sector expanded by four percent. On the other hand, the industry sector contracted by 4.4 percent, pulled down by the manufacturing sector which contracted for the third consecutive quarter with 7.6 percent from a growth of 5.4 percent recorded in the same period last year.

Augusto Santos, acting director-general of the National Economic and Development Authority (NEDA), said the 0.8 percent growth in the third quarter reflects the economy’s gradual recovery.

“There are signals that the global economic rebound is underway, with some Asian neighbors freshly out of recession,” Santos said.

He stressed that the Philippines had never entered recession, which economists describe as two consecutive quarters of contraction.

In the first quarter, GDP grew by 0.4 percent and in the second quarter, by a revised 0.8 percent.

“Our economic performance though was a deceleration from the strong growth of 4.6 percent in the third quarter of 2008,” Santos said.

The acting NEDA chief said government and private sector programs, flexible work arrangements, and the frontloading of infrastructure projects under the Economic Resiliency Plan (ERP) kept the economy’s growth and employment afloat during the global recession.

In contrast, several other economies are still experiencing massive layoffs and all-time high unemployment rates, he said.

Santos said that while the global crisis is still there, “the worst is over.”

“The key growth drivers for 2009 are trade, business process outsourcing (BPOs), construction, mining and quarrying, and private and government services,” he said.

For the whole year, the government expects the economy to grow anywhere from 0.8 percent to 1.8 percent. –Iris C. Gonzales (The Philippine Star)