Wednesday, 9 December 2009

Services and Agriculture push Q3 GNP by 3.5%

Despite the global recession, the country’s gross national product (GNP) grew by 3.5 percent in the third quarter this year, boosted by the services and agriculture sectors. GNP is the sum of goods and services produced by the country.

Gross domestic product (GDP), which is GNP minus overseas remittances, however, grew by only 0.8 percent in the same period, much lower than the 1.5 percent growth in the second quarter but still within the target range of between 0.8 percent and 1.8 percent for the year.

In a press briefing today immediately after the NEDA Cabinet group meeting attended by President Gloria Macapagal-Arroyo, National Economic and Development Authority (NEDA) director-general Augusto Santos said improved agriculture output (which was still unaffected by typhoon Ondoy on Sept. 26) offset negative manufacturing growth.

Santos said the country’s growth reflected in part the 8.8 percent average growth in the 30-member Organization of Economic Cooperation and Development (OECD), many of which are its trading partners

Santos said manufacturing is expected to rebound next year with the resurgence of worldwide demand for semi-conductors. Semi-conductors and electronics currently account for 60 percent to 70 percent of the country’s exports.

Meanwhile, Santos said the peso remained strong against the US dollar, with gross international reserves (GIR) at almost $44 billion or the equivalent of about eight months worth of imports. A comfortable GIR is equivalent to three months of imports.

The country is awash in foreign currency because of three factors: strong overseas remittances, continued foreign direct investments, and the reentry of portfolio investments or foreign money invested in the local stock market.

On another front, Santos said the Philippines recorded a 7.5 percent unemployment rate so far, this year, compared to the 11 percent of the United States, which exited from recession at the end of the third quarter.

Santos also recommended that the national government continue its stimulus spending even though the global economy is on the mend. He, however, said the national government should keep its fiscal deficit at between P230 billion and P250 billion or about 3.2 percent of GDP. Right now, the deficit is already at P300 billion. (PND)

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