GDP GREW HIGHER THAN EXPECTED AT 4.4% IN 3RD QUARTER
MANILA, November 28, 2003 (STAR) By Conrado M. Diaz Jr. - The domestic economy grew at a better-than-expected rate of 4.4 percent in the third quarter, pulled by a strong agricultural output and the sustained growth in the services sector, National Economic and Development Authority (NEDA) officials said yesterday.
Socioeconomic Planning Secretary and NEDA director general Romulo Neri earlier estimated growth in the gross domestic product (GDP) at between 3.8 to 4.3 percent during the period.
Based on figures released yesterday by the National Statistical Coordination Board, GDP – the total value of goods and services produced by the domestic economy – surged by 4.4 percent, or higher than the 3.8-percent growth a year ago.
NEDA deputy director general Raphael Lotilla said the economy "hurdled the persistent security threats and political uncertainties spawned by the failed July 27 Oakwood mutiny," as the major industry sectors contributed positively to GDP growth.
The combined agriculture and fishery sector, which make up a fifth of GDP, rebounded from its lackluster performance (-0.4 percent contraction) last year to post a 5.5 percent growth in the July to Sept. period due to the outstanding growth of palay, fishery, and forestry supported by favorable weather conditions and strong government support for agriculture, Lotilla said.
The country’s main staple, palay, led the bumper crop harvest for the quarter with a hefty 20.4 percent increase in production, its highest growth level over the last 16 quarters.
The services sector, the largest contributor to economic production with about 45 percent of GDP, also rose at a faster pace of 5.6 percent, from five percent in 2002 on the back of the stronger than expected rebound of government services. Transportation, communication and storage services remained at the sector’s forefront with a 7.9 percent growth, followed by finance, government, trade and real estate.
Meanwhile, the industry sector lagged behind with a 2.3 percent growth, lower than the 4.4 percent clip last year, due to the slowdown in construction activities and utilities (electricity, gas and water), notwithstanding the increment in manufacturing.
Lotilla added another noteworthy development was the strong growth in investment at 7.7 percent, mainly in durable equipment. "The investments are taking place in agriculture, textile, sugar milling, pulp and paper, railway and water transport, and office machinery. These investments are seen to increase the competitiveness and productivity of these industries and thus enhance export performance," he said.
In the same three-month period, the gross national product (GNP) –GDP plus net factor income from abroad – expanded by 5.9 percent from 3.1 percent a year earlier due to the robust 28.4 percent growth in compensation inflow primarily from remittances of overseas workers. Last year, net income from abroad shrunk by 6.2 percent.
For the first three quarters of 2003, GDP growth accelerated to 4.3 percent, from 3.9 percent in 2002 while GNP rose by 5.7 percent, from 3.2 percent last year.
"Given the year-to-date performance, the economy is now assured of attaining the GDP low-end forecast of 4.2 percent and the high-end GNP forecast of 5.4 percent," Lotilla said.
For the fourth quarter, Lotilla said GDP is projected to grow at a slower pace of between 3.8 - 4 percent as agriculture growth normalizes due to the tapering off effect of the strong output last year arising from a bumper agriculture harvest.
He added industry and services sectors are likewise expected to grow "respectably," bolstered by better export performance and higher public spending as government makes up for its first semester under-spending while remaining within its fiscal program.
Reported by: Sol Jose Vanzi
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