5/29/2008 10:31:40 AM
Statement of Socioeconomic Planning Secretary Augusto B. Santos on the Release of the First Quarter 2008 National Income Accounts
The domestic economy continued to remain firm notwithstanding the growing difficulties in the external environment. Therefore, for the first quarter of 2008, gross domestic product (GDP) grew by 5.2 percent while the gross national product (GNP) extended its run to expand by 7.3 percent on account of the 30.3 percent growth registered by the country’s net factor income from abroad as compensation inflow grew by 7.2 percent and property income increased by 22.8 percent. Going into the details, the 3.0 percent growth posted by the agriculture sector can be traced to the higher output of palay, corn, banana, coconut, and poultry. In addition, the significant increase in the country’s agro-based exports particularly coconut products, pineapple, coffee, rubber, and seaweeds also helped prop up the sector. The services sector rose at a healthy 6.9 percent, bolstered by real estate, finance, and trade. The real estate subsector continues to be buoyed by demand for office space as well as residential spaces from OFWs. However, industry growth was sluggish at 3.9 percent compared to the 6.6 percent posted in the same period in 2007, on account of the decline in public construction and weak exports. Noteworthy though is the mining sector’s continued robust performance due to the 22.6 percent rise in copper output in the first quarter of this year. On the demand side, the external sector continues to struggle in an environment characterized by high oil prices and weak global demand. Nonetheless, domestic demand provided significant support to overall economic growth as both consumer and investor confidence held up well in the first quarter. Private consumption expenditure rose further by 5.1 percent as households consolidate their income on food (5.4%), transportation and communication (12.2%), household furnishings (9.7%), beverages (3.0%), household operations (2.8%), and miscellaneous expenses (2.8%). Overall capital formation registered a respectable growth of 7.3 percent in real terms. A noteworthy development is the strong growth in investment coming from durable equipment, which grew by 8.2 percent. Data showed increasing investments in agriculture, textile, sugar milling, mining and construction machineries, pulp and paper, air and water transport, and office machines. These investments are seen to enhance the competitiveness of and productivity in these industries. Looking forward, given the uncertainties and risks prevailing in the external environment, full-year GDP growth is expected to settle between 5.7 – 6.5 percent. During the meeting of the Development Budget Coordination Committee (DBCC) yesterday, the members of DBCC committed to finetune the fiscal program in order to support this growth.