Economic growth slows to 3.2% in Q3

MANILA, Philippines - Underspending by the government and global uncertainties continued to drag economic growth in the third quarter, with gross domestic product (GDP) expanding by only 3.2 percent from the 7.3 percent “honey moon growth” a year ago and from the revised 3.1 percent recorded in the second quarter of the year, the National Statistical Coordination Board (NSCB) reported yesterday.

The third quarter economic performance brought GDP growth in the first nine months of the year to 3.6 percent, quite a distance from even the lower end of the government’s 4.5-percent to 5.5-percent growth target for the year.

Despite the lackcluster growth of the economy, Socioeconomic Planning Secretary Cayetano Paderanga Jr. said there are favorable prospects for the fourth quarter of the year.

“These include the following: anticipated higher demand on account of the Yuletide and harvest seasons; a more stable macroeconomy; a broadly steady consumer sentiment and the continued inflows of remittances from Filipinos overseas,” Paderanga said.

He also said the full implementation of the P72-billion.

Disbursement Acceleration Program of the government would take effect in the fourth quarter of the year.

Finance Secretary Cesar Purisima, for his part, said the economic team would continue to be watchful of the global economy and work toward the goal of having a sustainable inclusive growth for the country. “We welcome the modest third quarter growth figure given present undertainties in the global economy. Nevertheless, we will continue to work harder to chart the country to a highes growth trafectory,” Purisima said.

NSCB Secretary-General Romulo Virola said uncertainties abroad and unfavorable weather conditions contributed to the poor performance of the economy in the third quarter of the year.

“The so called death spiral of debt that hounds our trading partners, the uninvigorating, albeit already expanded government spending, and the decline in fishing due to unfavorable weather and the high cost of fuel contributed to this relatively lethargic growth,” Virola said in a press briefing yesterday.

The economy would have grown at a slower pace if not for the positive performance of the services sector.

“The services sector saved the domestic economy from posting an even lower growth,” Virola said.

On the demand side, consumer spending bolstered growth, he said.

However, the much-delayed implementation of the Public-Private Partnership program has pulled down construction growth, Virola said.

Furthermore, he said that export of goods has been severely affected by the global crisis, posting a double-digit decline for the first time since the second quarter of 2009.

“On a seasonally adjusted basis, GDP grew by 0.3 percent while gross national income grew at a faster pace of 0.4 percent in the third quarter from 0.1 percent in the second quarter of 2011,” Virola said.

By sector, the agriculture, forestry and fishery sector declined hugely by 3.9 percent.

On the other hand, industry rebounded slightly to 0.3 percent from a decline of 4.2 percent in the previous quarter.

i“The modest performance of manufacturing weakly supported by mining and quarrying was negated by the contraction of construction and the decline of Electricity Gas and water. On the other hand, services sector recorded a 1.2 percent growth for the third quarter of 2011 from 2.8 percent in the previous quarter, as all subsectors recorded positive growth,” the NSCB’s Virola also said.