The Philippine economy posted a 7.8 percent gross domestic product (GDP) growth in the first quarter of 2013 from 6.5 percent in the same period last year, fuelled by the strong performance in all major sectors.
With a sustained government capital spending and upbeat business and consumer sentiment, the first quarter GDP growth was the highest so far under the Aquino administration and also the third consecutive quarter of more than 7 percent growth.
Socio-economic Planning Sec. Arsenio Balisacan said the first quarter growth surpassed market and government expectations following robust performance in all major sectors of the economy and also the highest among ASEAN economies, particularly Indonesia (6.0%), Thailand (5.3%), Vietnam (4.9%), even higher than that of the People’s Republic of China (7.7%).
“Business confidence and consumer optimism fuelled this growth, putting to rest doubts cast on the 2012 figures as being due to base effects only,” said Balisacan.
The development on the production side was broad based as all major sectors contributed positively to growth during the period. Services expanded by 7.0 percent; industry, by 10.9 percent; and agriculture sector by 3.3 percent.
“Impressive performance of these sectors prove that the country is already reaping the benefits of strengthening priority sectors that are potential growth drivers and employment generators,” said Balisacan.
Heightened domestic demand led to the local manufacturing sector growing at an impressive rate of 9.7 percent.
Also stirring is the construction sector that grew 32.5 percent from January to March this year, indicating a good positioning towards an industry-led economy.
“Initially, this was led by infrastructure spending of the government. By the second half of 2012, private construction started to rebound,” Balisacan explained.
Retail trade remained strong as the spending capacity of Filipinos continued to grow due to the improving employment situation, higher overseas Filipinos (OF) remittances, and stable inflation.
The agriculture sector growth is also catching up with a 3.3 percent growth rate as the fisheries subsector bounced back from a series of contractions to a growth of 5.5 percent during the quarter.
On the demand side, capital formation has primarily driven overall growth with its 47.7 percent expansion, surpassing the contribution of household consumption which grew by 5.1 percent.
“For the first time, expenditure in capital formation, including other private sector investments such as on durable equipment, contributed more to growth than household consumption expenditure,” said Balisacan.
Government consumption also grew by 13.2 percent due to state support for social programs such as the Pantawid Pamilyang Pilipino Program (4Ps), agriculture development programs, and the rationalized MOOE for public elementary and high school under the Department of Education (DepEd).
Net exports, however, contracted primarily due to a decrease in external demand for electronic components.
“While we recognize our robust performance in the first quarter, we will continue to be vigilant against downside risks and address critical constraints to maintaining this growth momentum,” said Balisacan.
He stressed the importance of creating conditions for sustained growth in other sectors or areas with high growth potential and link the poor to these growth centers.
“The faster this can be done, the better it will be for the greater number of our people,” said Balisacan.
The government will put emphasis on innovation, technology and research and development as well as facilitate the improvement in labor productivity.
“What all these demands is a greater sense of urgency among us in government as well as better coordination between and among the various agencies charged with implementing programs and projects in order to maximize efficiency and effectiveness,” Balisacan explained.
The government is committed to maintaining macroeconomic stability through low and stable inflation, and sustainable levels of the fiscal deficit and the external performance indicators.
Balisacan stressed that investment grade rating from Fitch and Standard and Poor’s for the country is an opportunity for the business sector to expand their interests and generate more employment.
“We remain positive in our outlook and we will translate this into positive action to achieve inclusive growth. We hope that the private sector will maintain a positive outlook as well, and translate this into greater participation in the growth process,” he concluded.
The continued inflow of remittances from our overseas workers accelerated the net primary income from the rest of the world to grow by 3.2 percent boosting the gross national income (GNI) growth to 7.1 percent from 5.7 percent in 2012.
On a seasonally adjusted basis, GDP is gaining momentum growing by 2.2 percent in the first quarter of 2013. GNI grew by 1.9 percent.
All major sectors posted positive growth in seasonally adjusted terms for the first quarter of 2013. In particular, the agriculture sector posted a growth of 0.8 percent in the first quarter of 2013 from 0.4 percent the previous quarter.
However, the industry slowed down to 2.5 percent growth in the first quarter of 2013 from 4.0 percent in the previous quarter.
But the services sector accelerated to 2.2 percent in the first quarter of 2013 from 1.1 percent in the previous quarter as all its subsectors recorded positive growth. Positive growth in seasonally adjusted terms across major sectors was noted since the fourth quarter of 2010.
With the country’s projected population reaching 96.8 million in the first quarter of 2013, per capita GDP grew by 6.1 percent while per capita GNI grew by 5.3 percent and per capita household final consumption expenditure (HFCE) grew by 3.4 percent.