Philippines: Economic growth picks up in fourth quarter
January 31, 2011
In the fourth quarter, GDP expanded 7.1% over the same period the year before. The reading was above the 6.3% increase observed in the third quarter (previously reported, +6.5% year-on-year) and beat market analyst expectations that had GDP growing 6.0%. As a result, full-year economic growth reached 7.3% in 2010 and exceeded the official growth target of 5.0 - 6.0% set by the National Economic Development Authority (NEDA). According to the Philippine National Statistical Coordination Board (NSCB), domestic demand continued to drive growth in Q4. Investment accelerated from growth of 12.4% in the third quarter to a robust expansion of 22.8% in the fourth quarter. Private consumption also improved, adding 7.0% in the fourth quarter, up from the 4.1% increase registered in the previous quarter. Exports of goods and services grew at a slower 21.1% pace (Q3: +28.3% yoy), while imports accelerated to 21.8% (Q3: +18.5% yoy). As a result, the net contribution from the external sector to overall economic growth deteriorated from 5.1 percentage points in the third quarter to minus 3.0 percentage points in the fourth quarter. At the sector level, the quarterly reading was driven by growth of 8.3% in the industrial sector (Q3: +8.6% yoy) and services, which, although down slightly over the previous quarter, rose 6.9% (Q3: +8.0% yoy). Furthermore, the agricultural sector recovered after four consecutive quarters of negative growth and added 5.4%, mostly due to the harvest season and favourable weather conditions. The government expects growth to remain within the 7.0 - 8.0% target in 2011.