Philippines: Economic growth slows in 2011 on declining exports
January 30, 2012
In the fourth quarter, GDP expanded 3.7% over the same period the year before. The reading came in slightly above the 3.6% increase observed in the third quarter (previously reported: +3.2% year-on-year) but below market expectations of a 4.0% expansion. In the full year 2011, the economy expanded 3.7%, less than half the 7.6% increase observed in 2010, dragged down by falling exports in the second half of the year. Moreover, full-year growth fell substantially short of the government's target of between 4.5% and 5.5% in 2011. Private consumption expanded 6.7% in the last quarter of the year (Q3: +6.8% yoy), while government consumption slowed from a 7.1% rise in the third quarter to a 5.8% expansion in the fourth. Fixed investment, on the other hand, accelerated from a 6.4% rise in the third quarter to a 7.5% expansion in the fourth. However, the fourth quarter GDP figure was negatively impacted by a reduced pace of inventory accumulation. Exports of goods and services fell 5.5%, less than the 11.9% drop recorded in the third quarter. Simultaneously, imports contracted 3.3% in the fourth quarter, contrasting the 0.4% rise in the third. As a result, the external sector's net contribution to overall economic growth remained negative, although it improved from minus 7.4 percentage points in the third quarter to minus 0.6 percentage points in the fourth. The government expects growth of between 5.0% and 6.0% in 2012.