The Philippine economy expanded at a slower pace in the third quarter mainly because of the weak agriculture sector and lower government spending, the National Statistical Coordination Board (NSCB) announced on Thursday.
During a briefing, Romulo Virola, NSCB secretary general, said that the economy, as measured by the gross domestic product (GDP), grew by 6.5 percent in the third quarter from 0.2 percent in the same period last year.
GDP is the total value of final goods and services produced in the country.
The third-quarter GDP was weaker compared with the revised second quarter growth of 8.2 percent and the 6.7-percent to 7.7-percent projection of the National Economic and Development Authority (NEDA).
The economy from July to September slowed as election period spending splurge diminished.
The fourth consecutive quarter of El Niño-driven decline in agriculture and the substantial deceleration of mining and quarrying also helped weaken the economy.
But consumer spending levels supported growth even as bad weather sank farm output, the government said.
Honeymoon quarter
According to Virola, the “honeymoon” third quarter growth for President Benigno Aquino 3rd is the highest when compared with 0.4 percent for President Fidel Ramos, negative 0.7 percent for President Joseph Estrada and 1.3 percent and 5.6 percent for the first and second terms, respectively, of President Gloria Arroyo.
Socioeconomic Planning Secretary Cayetano Paderanga said that the 6.5-percent economic expansion, although 0.2 percentage points below NEDA’s low-end forecast, is well within market the expectations of 6 percent to 7.5 percent.
Services, which comprise half the economy, grew 7.7 percent from a year earlier, as benign inflation drove people to spend more and to build and buy more homes, even as government spending on infrastructure petered out.
Industry rose 9.2 percent while agriculture, which accounts for about a fifth of the economy, shrank 2.5 percent.
The NSCB chief said that the expansion in intra-regional economic activity within the Asian markets provided the main impetus for the strong exports growth.
The slow but recovering US and Euro economies were also contributory factors, although demand in these economies is yet to normalize.
“We expect growth to moderate in the second half of 2010 but we remain quite optimistic that we will exceed the 5-percent to 6-percent target that was approved by the Development Budget Coordination Committee for 2010,” Virola said.
In the first nine months, the economy expanded by 7.5 percent from 0.7 percent in the same period last year.
Full-year growth
Paderanga said that the fourth-quarter growth is likely to be “around 6 percent” and for the whole year of 2010, the economy may expand “above 6 percent.”
Benjamin Diokno, former Budget secretary of the Estrada administration and economist at the University of the Philippines, said that the economy might likely hit a full-year growth of 7 percent.
“Agriculture activity and public construction would continue to be anemic in the fourth quarter,” Diokno added.
Meanwhile, Paderanga said that the Philippines’ recent economic performance compares well with its Asian neighbors. The country is ahead of Indonesia (5.8 percent), Malaysia (5.3 percent) and South Korea (0.7 percent).
Still, the Philippines is behind China (10.6 percent), Singapore (10.6 percent), Vietnam (7.2 percent), Thailand (6.7 percent) and Hong Kong (6.8 percent).
The Socio-economic Planning head said that the Philippine government will continue with the formulation and implementation of the needed policies and reforms that would keep the economy afloat amid the fragile world economy, concerns on rising oil prices and anticipated diminishing base effect. –Darwin G. Amojelar, Senior Reporter with report from AFP
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