REVENUE across all industries grew in the fourth quarter, but growth slowed compared to year-earlier levels, the Philippine Statistics Authority (PSA) said.

According to the PSA’s Quarterly Economic Indices (QEI) report, the total gross revenue index, which measures sales generated by all companies, rose 3.5% in the three months to December.

The fourth-quarter reading was the slowest year-on-year growth since the adoption of the 2016 base year.

Four out of eight industries expanded in the fourth quarter but at a lower rate of growth compared to a year earlier. These were trade (7.6% from 12.6%); electricity, gas and water supply (5.2% from 14%); transportation, storage and communication (3.9% from 4.1%); and real estate (5.5% from 8.7%).

Meanwhile, two sectors posted declines during the period: mining and quarrying (-1.6% from -1.7%); and manufacturing (-2.2% from 10.7%).

Bucking the trend were financial and insurance activities and other services, where growth accelerated to 13.7% (from 8%) and 7.3% (6.9%), respectively.

Employment declined 0.2% in the fourth quarter compared to the 3.1% growth logged a year earlier.

Sectors posting growth in employment during the period were: electricity, gas and water supply (0.5%); trade (2%); transportation, storage and communication (1.7%); financial and insurance activities (3.8%); and real estate (2.4%).

Declines were noted in mining and quarrying (-2%); manufacturing (-3.3%); construction (-0.3%); and other services (-0.5%).

Compensation growth accelerated to 4.7% in the fourth quarter from 4.2% a year earlier, led by financial and insurance activities (9%); manufacturing (8.5%); real estate (7%); mining and quarrying (3.9%); electricity, gas and water supply (3.8%); trade (3.8%); other services (2.6%); and construction (2.5%).

On a per-employee basis, compensation grew 4.8% from 1.1% a year earlier.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the slowdown “may be largely brought about by the global economic slowdown” due to the US-China trade war as well as “some spillover effects” of government underspending caused by the delay in the approval of the 2019 national budget.

“The slower global economic growth reduced global trade, including some Philippine exports that, in turn, caused some reduction in local manufacturing and other production activities,” Mr. Ricafort said.

“Reduced government spending especially on infrastructure… may have reduced the sales of local businesses especially those that are part of the supply chains of the various infrastructure projects… that suffered some delays,” he added.

Asked about the accelerated growth in per-employee compensation, Mr. Ricafort said unemployment and underemployment rates have been the lowest in nearly three decades.

In the first quarter of 2020, revenue “could still pick up” with government spending as the major growth driver of the economy for this year.

On the other hand, he noted businesses that scaled down production in view of the enhanced community quarantine in Luzon “could experience some reduction” in revenues, as well as result in some reduction in incomes by some workers in adversely-affected industries.

“The supply of food, agricultural products, groceries, and other basic necessities are exempted. Thus, revenue of these exempt businesses could still continue to grow, as an offsetting factor,” the economist said. — Lourdes O. Pilar