MANILA, Philippines – Battered by the global financial turmoil and typhoons Ondoy and Pepeng, the Philippine economy, as measured by gross domestic product (GDP), grew by 0.9 percent last year, the slowest pace in 11 years, the National Statistical Coordination Board (NSCB) reported yesterday.
Last year’s growth, however, was still within the government’s 0.8 percent to 1.8 percent target and shows the Philippine economy’s resilience, said acting National Economic Planning Secretary Augusto Santos.
Malacañang was heartened by the economy’s performance last year, saying it indicated the Philippines is moving faster towards economic recovery after surviving the full brunt of the global recession in 2009.
Deputy Presidential Spokesman Gary Olivar said the full year and fourth quarter GDP figures were the results of efforts of the Arroyo Administration to avoid recession even when two-thirds of the world’s economies were experiencing negative growth rates.
“This is happy news. We have certainly survived the worst of the recession and this year, while the economies of our economic and trading partners continue to recover, we foresee our economy getting stronger especially in the exports and manufacturing sectors,’’ Olivar said.
According to NSCB data, the 0.9 percent is the slowest economic growth recorded since 1998 when GDP contracted by 0.6 percent, a year after the Asian financial crisis hit the country. Last year’s growth also reflected a marked slowdown from the 3.8 percent recorded in 2008.
However, in the fourth quarter of 2009, the economy accelerated to its fastest pace during the year, growing by 1.8 percent compared to a revised 0.4 percent in the third quarter, data from the NSCB also showed. In the first three months of 2009, the economy contracted by 1.3 percent but recovered in the second quarter with a 1.5 percent growth.
Albay Gov. Joey Salceda , who is also President Arroyo’s chief economist, said the fourth quarter growth would have rebounded to 2.9 percent were it not for the impact of Ondoy and Pepeng particulary on agriculture which suffered a 2.8 percent decline after a 1.6 percent increase in the third quarter.
On a seasonally adjusted basis, the economy grew by by 0.9 percent in October to December from the previous quarter.
“What is important is that our economy never went into a recession despite the odds,” Acting Socioeconomic Planning Secretary Augusto Santos said yesterday. Our economy has proven itself resilient, and elections will bring fresh mandates and new energy to our society. We are thus optimistic,” Santos added.
Growth in the fourth quarter was largely driven by the 4.2 percent growth in the service sector during the period from only 1.3 percent in the same period in 2008. For the whole of 2009, the service sector, which includes transportation, trade and finance services, grew by 3.2 percent from 3.3 percent the previous year.
This strong performance of the service sector offset the 2.8 percent contraction recorded in the agriculture, fishery and forestry (AFF) sector during the quarter compared to the 2.9 percent growth recorded in the same period last year. For the whole of 2009, the AFF grew by a measly 0.1 percent compared to 3.2 percent in 2008.
“Damage and losses caused by tropical storm Ondoy and typhoon Pepeng took a heavy toll,” Santos said when asked about the slowdown in agriculture.
The industry sector, which includes mining, manufacturing, quarrying and construction, slowed down in the fourth quarter with a 1.1 percent growth from 5.3 percent in the same period in 2008. Industry contracted by two percent in 2009, dragged by a slowdown in private construction activities from a five percent growth in 2008.
Increased consumer and government spending compensated for decreased investments in durable equipment and the sustained decline in demand for Philippine exports from the country’s major trading partners, Santos said.
With the performance of the economy in 2009, Santos said GDP growth this year may hit the higher end of the official forecast range for 2010 of 2.6 percent to 3.6 percent.
“For 2010, the government will continue to implement the appropriate policies that will provide the right environment for our key growth drivers such as business process outsourcing (BPOs), finance, mining and quarry, construction and private services,” Santos said.
He also said the government would continue with stimulus spending but at a reduced level from last year.
In addition, about nine million Filipinos working abroad helped boost the economy by sending home $25.9 billion, or an average of more than $2 billion in monthly remittances. That was a 15.6 percent increase over the previous year’s $22.4 billion. –Iris C. Gonzales (The Philippine Star) with AP
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