Economy expands 6.4% in fourth quarter, 5.9% in 2018

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The Philippine economy posted a 6.4% gross domestic product (GDP) growth in the fourth quarter, the Philippine Statistics Authority (PSA) reported this morning.

The October-December outcome was higher than the revised six percent in the third quarter and 6.3% in the fourth quarter of 2018.

This brings growth in 2019 to 5.9%, slower than 2018’s 6.2%. The latest full-year figure matched the median estimate in a BusinessWorld poll last week but missed the downward-revised 6%-6.5% target set by the government for 2019.

The latest full-year reading was the slowest in eight years or since the 3.7% growth in 2011. It also broke the economy’s seven-year streak of at least six-percent growth.

The industry sector grew by 5.4% in the fourth quarter, slower than 6.6% recorded in the fourth quarter of 2018. For the year, it grew by 4.9% compared to 6.7% in 2018.

Agriculture, hunting, forestry and fishing grew 1.5% in the fourth quarter from 1.8% in the same three months in 2018. This brings the sector’s full-year growth at 1.5%, faster than 2018’s 0.9%.

Services remained the main engine of growth on the supply side as it grew by 7.9% in the fourth quarter, faster than the 6.8% recorded in the same period in 2018. For full-year 2019, it grew by 7.1% versus 2018’s 6.8%.

On the expenditure side, household spending grew 5.6%, faster than 5.3% in the fourth quarter of 2018. It logged in a full-year 2019 growth of 5.8% versus 2018’s 5.6%.

Government spending grew by 18.7% in the fourth quarter from 12.6% in 2018’s comparable three months. However, its 10.5% growth in 2019 was slower than the 13% expansion recorded in 2018.

Private investment, represented in the data as capital formation, posted a 0.4% growth during the quarter compared to 4.9% previously. For 2019, it declined by 0.6% compared to a 13.2% growth in 2018.

Exports of goods and services rose by two percent in the fourth quarter (full-year 2019: 3.2%), slower than 14.4% in the fourth quarter of 2018 (2018: 13.4%). Imports likewise slowed, growing by 0.3% in the fourth quarter (2019: 2.1%) compared to 12.4% in the fourth quarter of 2018 (2018: 16%).

Gross national income – the sum of the nation’s GDP and net income received from overseas – registered a growth of 6.2% in the last quarter of 2019 from 5.7% in 2018’s comparable three months. For 2019, it grew 5.5% against 2018’s 5.9%. — J. E. Hernandez