Gross domestic product (GDP) growth for the July to September period was below the revised 8.2% and 7.8% jumps recorded in the second and first quarters, respectively. It was also lower than the 6.8% estimate in a previous Reuters poll of economists.
With investors’ and consumers’confidence soaringhigh in a regime of benign inflation, the domestic economy posted a GDP growth of 6.5 percent in the third quarter of 2010 from 0.2 percent the previous year. The honeymoon Q3 growth for President Aquino is the highest when compared with 0.4 percent for President Ramos, negative 0.7 percent for President Estrada, and 1.3 percent and 5.6 percent for the first and second terms, respectively, of President Arroyo.
Services regained the driver seat as the prime mover of economic growth with the robust performances of Trade, Ownership of Dwelling and Real Estate, Private Services and Finance. Industry failed to sustain its remarkable performance during the first semester even as Manufacturing continued its recovery in response to the improved domestic and external demand, and private sector-led Construction activities almost doubled from a year ago. The fourth consecutive quarter of El Niño-driven decline in Agriculture, the diminished spending by Government, and the substantial deceleration of Mining & Quarrying contributed to the slowdown in economic growth.
The decelerated but double digit growth in the Net Factor Income from Abroad at 13.7 percent pushed the Gross National Product to grow by 7.5 percent from 4.1 percent in 2009.
With the economic growth of the third quarter failing to match the robust performance during the preceding quarters, the seasonally adjusted estimate of the GDP declined by 0.5 percent compared to a 1.4 percent growth in the previous quarter. However, the seasonally adjusted GNP continued to grow albeit at a slower rate of 1.2 percent from 1.8 percent in the second quarter of 2010.
The Agriculture, Fishery and Forestry sector grew by 0.3 percent from the second quarter on account of the growths posted by Poultry, Fishery, Other Crops, and Banana.
Coming from a seasonally adjusted growth of 3.0 percent in the second quarter, Industry declined by 4.4 percent as all subsectors failed to sustain their momentum after five consecutive quarter of positive growth.
Services sector, the driver of domestic growth during the third quarter, registered a 1.9 percent acceleration from 0.8 percent growth in the previous quarter. Except for Government Services, all subsectors exhibited positive growths.
The Bangko Sentral ng Pilipinas (BSP) said it may keep its policy rate steady at a record low of 4% even with sustained economic growth.
Interest rates have remained unchanged for the 12th straight central bank policy meeting on November 18, and these are likely to stay the same going into 2011 due to benign inflation outlook.
The Philippines is one of few Asian countries not to have raised interest rates yet since the global financial crisis.