By Mark T. Amoguis, Researcher
REVENUE across all industries grew in the first quarter of 2018 but eased from a year ago, the government reported yesterday.
The total gross revenue index, a measure of sales generated by companies, increased by 6.9% in the first three months of the year, data from the Philippine Statistics Authority’s (PSA) Quarterly Economic Indices report showed.
This was slower than the 8.9% growth recorded in the fourth quarter of 2017 and the 9.5% print logged in the first quarter last year.
Ruben Carlo O. Asuncion, chief economist at the UnionBank of the Philippines, said the gains in revenue during the quarter are “expected” and “parallel” to where a lot of economic growth are coming from.
“However, the decline is somewhat puzzling, since economic growth was actually higher this Q1 2018 compared to the same period last year. Upon checking, there was a general decline in all of the industries except finance that steeply climbed in the period being considered,” Mr. Asuncion said.
The PSA said the increase seen in the first quarter was driven by finance, which climbed by 11.7% from 2.8% last year. This was followed by the real estate (8.9% from 12.8%) and private services (7.7% from 6.7%) sectors.
Slower growth was observed in trade (7.3% from 8.6%), transportation and communication (6.4% from 8.1%) and manufacturing (5.8% from 13.0%).
The Philippine economy grew by 6.8% year-on-year in the first quarter on the back of surge in government spending and capital formation.
The second-quarter figure, which economic managers believe could have grown by at least 7%, will be reported by the PSA on Aug. 9.
Meanwhile, employment also rose during the period, with the total employment index increasing by 1.5% compared to 1.4% last year.
Sub-sectors posting employment growth were trade (2.8% from 0.8%), electricity and water (2.7% from 1.3%), private services (1.8% from 1.5%), and manufacturing (1.1% from 1%). On the other hand, slowdowns were seen in transportation and communications (2.1% from 5.5%), real estate (1.4% from 9.8%), and finance (0.5% from 2.8%).
Employment in mining and quarrying improved to a 5.1% decline compared to the 5.6% drop a year ago.
“Annual employment gains point to an average of 1.5 million jobs for the last two surveys in the first half [of the year]. This may mean that employment growth, though marginal, is robust and growing,” UnionBank’s Mr. Asuncion said.
Total compensation eased to 6.1% in the first quarter from 6.2% in the same period in 2017. All subsectors posted growth except for mining and quarrying, which dropped by 6.5%. Transportation and communication (8.5% from 3%) recorded the fastest growth in total compensation.
On a per-employee basis, compensation slowed 4.6% from 4.8% last year.
Mr. Asuncion said that the “marginal” slowdown recorded during the quarter may been due to the increase in price levels at the start of year, referring to the Tax Reform for Acceleration and Inclusion (TRAIN) law which took effect last January.
“The impact may have come from the additional taxes levied by the TRAIN law. Although jobs are created, but compensation may have not been growing due to additional production costs to firms.”
By Mark T. Amoguis, Researcher