By Jochebed B. Gonzales, Senior Researcher
COMPANY revenues grew faster in the fourth quarter as stronger sales were reported across key industries, the government reported on Friday.
Data from the Philippine Statistics Authority’s (PSA) latest Quarterly Economic Indices report showed that the total gross revenue index — a measure of sales generated by companies — expanded 8.9% in the final three months of the year, slower than the 9.4% recorded in the fourth quarter of 2016 but faster than the 8.6% logged in the third quarter of 2017.
Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines, noted that revenues in 2017 had just come off from a higher base with 2016 being an election year.
“Historically, it is known that the Philippine economy gets an economic growth bump during an election year with a slower economic expansion a year after. However, it is fitting to note that the decline in growth from 2016 to 2017 was fairly smaller compared to previous same periods.”
Expansion was observed across all industries during the period. Leading the way was real estate whose revenues grew 11% in the fourth quarter of 2017 albeit easing from 13.4% in 2016’s comparable three months.
Next in line were growth seen in private services (10.6% from 6.6%); finance (10.2% from 8.9%); trade (9.5% from 9.2%); manufacturing (7.7% from 10.6%); and transportation and communication (5.1% from 8.8%).
On the other hand, employment slowed down during the period, with the total employment index expanding 1.6% in the fourth quarter compared to 1.9% in the fourth quarter of 2016. Sub-sectors posting the greatest growth were real estate (2.9%), transportation and communications (2.6%); manufacturing (2.2%); electricity and water (1.6%); mining and quarrying (0.7%); private services (0.7%); finance (0.5%) and trade (0.2%).
Compensation rose 5.8% during the period but was slower than the 6.5% registered in 2016. Backing this growth were manufacturing (9.5%); transportation and communication (7.7%); real estate (6.4%); trade (4.3%); finance (4.3%); mining and quarrying (4.2%); and private services (3.7%).
On the other hand, compensation in the electricity and water sector declined by 1.8%, a reversal from its 5.8% growth year on year.
Moving forward, the economist sees a “slight slowdown” in company sales in subsequent quarters due to the “immediate shock” brought by the increase in excise taxes from the Tax Reform for Acceleration and Inclusion law, which took effect last January.
“However, I still see that these would be supply-side induced. Thus, it will be temporary,” Mr. Asuncion said.