PHL economy slowed down in 2011 – NSCB

The Philippine economy grew to a slower place at 3.7 percent in 2011, the first full year of President Benigno Aquino III’s administration, compared to 7.6 percent in 2010, according to the latest government data released Monday.   Last year's growth figure was way below the 5.5 percent forecast estimated by American banking giant Citigroup and the 4.3 percent expected by British banking giant Hongkong Shanghai Banking Corp.   The slowdown was attributed to government underspending on infrastructure in the second and third quarters, and sustained decline in fishing among other factors, the National Statistical Coordination Board (NSCB) said.  In a statement released Monday, NSCB secretary-general Romulo A. Virola described Philippine growth last year as “relatively feeble” compared to the previous year, which was boosted by election spending.   Earlier this month, former President and now Rep. Gloria Macapagal Arroyo had criticized Aquino for the lower economic growth in the last quarter of 2011. When she turned over the presidency to Aquino in June 2010, the economy posted a 7.9-percent growth, Arroyo said.   “The momentum inherited by President Aquino from my administration is slowing down, and despite his initial brief honeymoon period, he has simply not replaced my legacy with new ideas and actions of his own,” Arroyo wrote, in a paper she wrote while in detention entitled “It’s the economy, student.” Weak economic growth last year resulted in a decline in per capita GDP from 5.6 percent in 2010 to 1.8 percent last year.  According to the NSCB, gross national income (GNI) went up by only 2.6 percent in 2011, as opposed to 8.2 percent growth the year before. Per capita GNI also declined to 0.7 percent for the year 2011 from the previous figure of 6.1 percent.    Higher consumer spending   Consumer spending, on the other hand, spiked to 6.1 percent last year, a marked improvement from the previous 3.4 percent figure.   However, Virola said this “was not enough buffer for the decline in global trade and the moderated investments in fixed capital formation.”   Household final consumption expenditure (HFCE) also went up by 4.1 percent from the previous 1.4 percent in 2010.    Fourth quarter 2011 also down   “The catch up government spending in the last quarter and the resilience of the services sector helped cushion the impact of the slowdown in the Eurozone, the creeping economic recovery of the US and the typhoons towards the end of the year as GDP [gross domestic product] grew by 3.7 percent in the fourth quarter from 6.1 percent in the same quarter last year,” the NSCB said.   Consequently, per capita GDP went down to 1.8 percent from the 4.1 percent posted in the previous quarter.   Per capita GNI also went down by 1.6 percent from 3.6 percent in the 4th quarter of 2011.    During the last three months of 2011, household consumption posted a 6.7 percent growth. The construction sector recovered and was pegged at 11.4 percent, but this growth was partly negated by the decline in exports and reduced addition to inventory.   “More fun” in the first quarter of 2012   In the last quarter of 2011, GDP grew by a mere 0.9 percent, which is a slight improvement over the 0.8 percent growth in the 3rd quarter.   GNI, on the other hand, went up to 1.7 percent from 0.9 percent growth in the 3rd quarter. According to Virola, this provides “some indication that in the first quarter of the year of the dragon, it will indeed be more fun for the Philippine economy.”   A decline in the Agriculture, Hunting, Forestry and Fishing sector—1.2  percent from the previous quarter’s 3.7 percent—was traced to the contraction of output of palay, fishing, other crops, and corn.   The industry sector, meanwhile, is on the way up, thanks to the expansion of the construction and manufacturing subsectors, with a 1.9 percent growth in the 4th quarter as compared to the previous quarter’s 1.4 percent.   The services sector, on the other hand, did not fare as well. It posted a 0.7 percent growth, down from the 1.4 percent figure it had in the 3rd quarter. Virola said it was “caused by the slow paced growth of all subsectors except for Public Administration and Defense and Transportation, Storage and Communication.” – KG/YA/OMG, GMA News