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HIGHLIGHTS
Fourth Quarter 2017
Philippine Economy Posts 6.6 Percent GDP Growth
in the Fourth Quarter of 2017; 6.7 percent in 2017
Gross Domestic Product (GDP) posted a 6.6 percent growth in the fourth quarter of 2017, driving the economy to grow by 6.7 percent for the entire year of 2017. Manufacturing, Trade, and Real Estate, Renting and Business Activities were the main drivers of growth for the fourth quarter.
Among the major economic sectors during the fourth quarter of 2017, Industry had the fastest growth of7.3 percent, followed by Services which grew by 6.8 percent during the quarter. Agriculture grew by 2.4 percent, rebounding from a 1.3 percent decline in the same quarter of the previous year.
Net Primary Income (NPI) slowed down by 4.1 percent compared with the 3.3 percent growth recorded in the fourth quarter of 2016. As a result, Gross National Income (GNI) posted a growth of 6.2 percent, faster than previous year’s growth of 6.0 percent. On an annual basis, GNI grew by 6.5 percent, while NPI’s growth is at 5.6 percent.
On a seasonally adjusted basis, GDP grew quarter on quarter by 1.5 percent in the fourth quarter of 2017 as compared with the 1.7 percent growth in the third quarter. The seasonally adjustedAgriculture sector posted a quarter-on-quarter decline of 0.1 percent, while Industry and Services grew by2.0 percent and 1.5 percent, respectively. Quarter-on-quarter growth of the Gross National Income (GNI) in the fourth quarter of 2017 was 1.5 percent.
With the country’s projected population reaching 105.3 million in the fourth quarter of 2017, per capita GDP and per capita GNI grew by 5.1 percent and 4.7 percent, respectively.
PRODUCTION SIDE
Agriculture, Hunting, Forestry and Fishing (AHFF)
AHFF, which accounted for 9.3 percent of the total GDP, grew by 2.4 percent in the fourth quarter of 2017. The sector contributed for 0.2 percentage point to the 6.6 percent growth of GDP during the period.
Agriculture recovers
The Agriculture Industry which accounted for 82.5 percent of the total AHFF sector increased by 3.0 percent in the fourth quarter of 2017 from a 0.7 percent decline in the previous year. Contributing mainly to the sector’s growth were: Palay, 4.4 percent; Poultry, 4.7 percent; Agricultural activities and services, 4.3 percent; Livestock, 1.8 percent; Sugarcane, 14.6 percent; Banana, 3.2 percent; and Coconut, 3.5 percent.
Meanwhile, the sectors that declined and pulled down the growth of Agriculture were: Corn, 5.6 percent; Other crops, 1.0 percent; Coffee, 9.1 percent; and Mango 10.1 percent.
Forestry increases
In the fourth quarter of 2017, Forestry grow by 1.0 percent, compared with the 6.6 percent contraction from the same period in the previous year.
Fishing drops
Fishing, which accounted for 17.4 percent of the total AHFF in the fourth quarter of 2017,decreased by 0.5 percent. The subsectors that pulled down Fishing performance were: Roundscad, Tiger Prawn, Skipjack and Others.
Industry
Industry slows down
Industry grew by 7.3 percent in the fourth quarter of 2017 as compared with the 7.9 percent growth in the previous year. The total Industry, which shared 34.8 percent to the GDP during the period, contributed 2.5 percentage points to the total GDP growth. Manufacturing dominated the contribution to Industry during the quarter with 6.2 percentage points.
Mining and Quarrying manages to grow
Mining and Quarrying managed to increase in the fourth quarter of 2017 by 8.8 percent but slower than the 10.8 percent posted in the same period of the previous year. Stone quarrying, clay and sandpits was the main contributor to the growth with 17.7 percent expansion. Other sub-sectors contributed to the growth were: Crude oil, Natural Gas & Condensate, 7.4 percent; Gold mining, 16.5 percent; Other non-metallic mining, 1.3 percent; and Nickel mining, 1.1 percent.
On the other hand, Other metallic mining and Copper mining posted decline by 11.6 percent and 12.2 percent, respectively.
Manufacturing contributes the most to GDP growth
Manufacturing remained the highest contributor to the country’s GDP with 8.8 percent growth in the fourth quarter 2017.
Among the industries under Manufacturing, Chemical & chemical products, which grew by 13.9 percent, led the growth of the sector with 2.2 percentage points. Other top contributors to the growth were: Furniture and fixtures with 32.9 percent growth; Radio, television and communication equipment and apparatus with 14.4 percent growth; Food manufactures with 2.9 percent growth and Non-metallic mineral products with 26.4 percent growth.
On the other hand, the following industries posted declines and pulled down the growth of the sector: Wearing apparel by 6.0 percent; Tobacco manufactures by 25.6 percent; and Textile manufactures by 0.7 percent.
Construction slows down
The Construction industry grew by 2.8 percent in the fourth quarter of 2017, slower compared with the10.7 percent growth recorded in the previous year. The growth was driven by the increase in Public Construction but was weighed down by the decline in Private Construction.
Electricity, Gas and Water Supplycontinues to expand
Electricity, Gas and Water Supply expanded by 5.1 percent in the fourth quarter of 2017, slower than the 9.2 percent growth recorded in the same period in the previous year. Electricity, which contributed 86.4 percent to the entire sector, slowed down to 5.4 percent from the 10.2 percent in 2016. Meanwhile, Steam and Water subsectors managed to grew at the rate of 2.1 percent and 3.2 percent, slower than the 3.9 percent and 3.6 percent growth rates posted in the previous year, respectively.
Services
Services remains the top contributor to GDP growth
Services, which remained as the main driver of the economy, expanded by 6.8 percent in the fourth quarter of 2017. It contributed 3.8 percentage points to the total GDP. The growth, however, was slower than the 7.2 percent growth recorded in the previous year. All subsectors, led by Trade and Real Estate, Renting & Business Activities, contributed positively to the growth of the entire Service sector.
Transportation, Storage and Communication (TSC) decelerates
TSC posted a 5.4 percent growth, slower compared with the 6.4 percent posted in the previous year. Communication, that shared 64.0 percent to the entire TSC, contributed 3.8 percentage points to the 5.4 percent growth. Moreover, its growth of 6.0 percent was higher than the 4.7 percent growth in the same period in the previous year.
The rest of the subsectors also contributed positively to the growth of TSC: Land Transportation, 1.9 percent; Water Transportation, 1.4 percent; Air Transportation, 6.7 percent; and Storage and Services Incidental to Transport, 8.5 percent.
Trade speeds up
Trade and Repair of Motor Vehicles, Motorcycles, Personal and Household Goods posted a 7.9 percent growth in the fourth quarter of 2017, as compared with the 6.5 percent growth in the same period in 2016. Retail trade, the top contributor to the growth of the sector, grew by 8.2 percent. This is higher than the 5.7 percent growth in the previous year.
On the other hand, Wholesale Trade slowed down to 7.3 percent as compared with the 9.2 percent growth in the fourth quarter of 2016.
Meanwhile, Maintenance and Repair of Motor Vehicles, Motorcycles, Personal and Household Goods registered a 4.3 percent growth, slower than the 9.7 percent growth posted on the same quarter of the previous year.
Financial Intermediation continues to grow
Financial Intermediation sector accelerated in the fourth quarter of 2017, posting a 5.9 percent growth. This is higher than the 5.5 percent growth recorded in the previous year. The performance was largely driven by Banking and Non-Banking Financial Institutions which grew by 7.3 percent and 5.4 percent respectively. Insurance likewise grew faster with 3.7 percent growth while Activities Auxiliary to Financial Intermediation expanded by 5.3 percent growth during the period.
Real Estate, Renting & Business Activities(RERBA) slows down
RERBA posted a 6.6 percent growth in the fourth quarter of 2017, slower than the 9.1 percent growth recorded in the previous year. The growth was driven by Renting and other Business Activities which grew by 8.3 percent as compared with the 14.4 percent growth in the same period of the previous year.
Ownership of Dwelling grew faster to 3.2 percent from 2.9 percent growth in the fourth quarter of 2016. Meanwhile, Real Estate maintained its previous year’s growth of 7.5 percent.
Other Services eases
Other Services posted 6.1 percent growth in the fourth quarter of 2017, faster than the 6.0 percent growth recorded in the same period last year. The growth was led by Education with 7.6 percent expansion contributing 2.9 percentage points to the growth of the sector. It was followed by Hotels and Restaurants with 8.9 percent growth.
Other subsectors also contributed positively to the growth: Recreational, Cultural and Sporting Activities, 2.6 percent; Health and Social Work, 3.8 percent; Other Service Activities, 7.3 percent; and Sewage and Refuse Disposal Sanitation and Similar Activities, 5.3 percent.
Public Administration and Defense continues to grow
Public Administration & Defense; Compulsory Social Security Schemes increased by 8.7 percent in the fourth quarter of 2017. The expansion of the sector was driven by the release of year-end bonus and cash gift of government employees, release of performance-based bonus of some agencies, creation and filling up of positions, and the increase in the base pay of government employees and allowances of the uniformed and military personnel based on Executive Order No. 201, series of 2016.
EXPENDITURE SIDE
Household Final Consumption Expenditure (HFCE) slows down
The household expenditure grew by 6.1 percent in the fourth quarter of 2017. This was slower than the 6.2 percent growth in the same period of 2016.
Food and Non-alcoholic Beverages, sharing 42.9 percent of the total household expenditure, maintained its growth of 5.6 percent from the previous year. Miscellaneous Goods and Services, the next top contributor of HFCE, grew by 7.8 percent. This was slower than the 8.0 percent in 2016.
Aside from the abovementioned expenditure items, the other top contributors to the growth of HFCE were: Housing, water, electricity, gas and other fuels,9.5 percent; Furnishings, household equipment and routine household maintenance,10.5 percent; and Restaurants and hotels, 9.5 percent.
On the other hand, the following declined: Alcoholic beverages and Tobacco, negative 7.6 percent; and Clothing and Footwear, negative 0.2 percent.
Government Final Consumption Expenditure (GFCE) posts double-digit growth
GFCEexpands to 14.3 percent in the fourth quarter of 2017, surpassing the 4.5 percent growth in the same period last year. The increase resulted from the release of year-end bonus and cash gift of government employees, the release of performance-based bonus of some agencies, the filling up of government positions.
The expenditure in the relief works and operations in Marawi, the school operating expenditures, purchase of drugs and medicines, and the payment for completed ASEAN-related events also contributed to the expansion of GFCE.
Private Construction weighs down Total Construction Investments
Investments in Construction grew by 2.9 percent in the fourth quarter of 2017, slower compared with the 9.3 percent growth in the previous year. Private Construction, which accounted for 74.9 percent of total construction investments, contracted by 2.9 percent compared with 6.9 percent growth in the same period in 2016. Meanwhile, Public Construction grew by 25.1 percent, faster compared with the 19.2 percent growth in 2016.
Investments in Durable Equipment relaxes
Investments in capital formation for Durable Equipment grew by 12.1 percent in the fourth quarter of 2017. This is slower than the 26.3 percent recorded in 2016. Increased investments were registered in thirteen (13) out of twenty (20) types of fixed asset investments.
The following subsectors contributed to the increase in investments: Road vehicles,
11.7 percent; Office miscellaneous durable equipment, 26.4 percent; Telecommunication & sound recording/producing equipment, 22.6 percent; Mining & construction machineries, 44.7 percent; and Office machines & data processing, 27.0 percent.
Meanwhile, the following subsectors contracted: Air transport, negative33.9 percent; Railway transport, negative 98.3 percent; Water transport, negative 68.5 percent; and Other special industrial machinery, negative 5.0 percent.
Investments in Breeding Stocks and Orchard Development (BSOD) decreases
Capital formation for Breeding Stocks and Orchard Development grew by
2.5 percent during the fourth quarter of 2017, slower compared with the 3.7 percent growth in the previous year.
Intellectual Property Products (IPP) accelerates
Investments for Intellectual Property Products accelerated to 35.3 percent in the fourth quarter of 2017 compared with 29.0 percent recorded during the same period last year. The growth can be attributed to the increased investment in Computer Software and Databases.
Changes in Inventories records additions
Changes in Inventories recorded a total of PhP 12.2 billion additions in the fourth quarter of 2017 compared with the PhP 17.2 billion additions in the same period in 2016. The agriculture, crude and petroleum, and government posted additions in their inventories.
Exports of Goods posts fifth consecutive double-digit growth
The country’s total Exports of Goods posted its fifth consecutive double-digit growth with 20.2 percent in the fourth quarter of 2017. This is higher than last year’s 12.8 percent growth.
The following commodities contributed to the growth of total Exports of Goods: Component/Devices (Semiconductors); 35.1 percent; Control Instrumentation; 73.8 percent; Metal Components; 50.4 percent; Communication/Radar;
106.6 percent; and Electronic Data Processing; 10.8 percent.
Meanwhile, the following commodities pulled down the growth of the sector: Articles of Apparel and Clothing Accessories, negative 33.3 percent; Ignition Wiring Set, negative 6.1 percent; Coconut Oil, negative 35.3 percent; Bananas, including Plantains, Fresh or Dried, negative 19.7 percent; and Pineapple and Pineapple Products,negative45.3 percent.
Exports of Services decelerates
Exports of Services recorded 12.6 percent growth in the fourth quarter of 2017. This was slower than the 15.7 percent growth in the same period last year. Travel was the highest contributor to the growth with 84.9 percent. Other contributors to the growth were: Miscellaneous Services, 3.7 percent; Transportation, 15.1 percent; and Insurance, 11.2 percent. Meanwhile, Government declined by 19.5 percent during the period.
Imports of Goods increases
The total Imports of Goods grew by 19.6 percent in the fourth quarter of 2017. This growth is lower than the 20.6 percent in the same period last year.
The following remained to be the top contributors to growth: Component/Devices (Semiconductors),51.7 percent; Electronic Data Processing, 50.5 percent; Base Metals, 37.1 percent; Electrical Machinery, 23.2 percent; and Cereals, 18.0 percent.
Meanwhile, the following commodities pulled down the growth of the total Imports of Goods: Transport Equipment, negative 3.9 percent; Dairy Products, negative
11.1 percent; and Office Equipment, negative 9.2 percent.
Imports of Services rebounds
Imports of Services accelerated to 9.9 percent in the fourth quarter of 2017, which was faster than the 0.5 percent recorded during the same period in 2016. Travel contributed the most to the growth, which grew by 8.7 percent. This was faster than the 3.8 percent growth posted in the previous year. Moreover, Miscellaneous Services, Transportation and Insurance grew by 11.9 percent, 12.5 percent and 7.0 percent, respectively.
On the other hand, Government pulled down the growth of thesector with negative 16.2 percent.
Trade Balance continuously records deficits
Total Exports valued at Php 1,181.8 billion at current prices was lower compared with the Total Imports valued at Php 1,585.7 billionat current prices during the fourth quarter of 2017. As a result, deficits of Php 403.9 billion was registered during the period.
Trade Index decreases
Trade index was recorded at 93.4 percent during the fourth quarter of 2017. This was lower than 94.6 percent posted during the same period in 2016.