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Claide John F. Estimar Mrs. Jocelyn Capacio
BSIT-J3T
THE PHILIPPINE ECONOMY (2014)
The Philippine economy grew by 5.7 percent in the first quarter of 2014, even as we continued to feel the lingering effects of the disasters that hit the country during the last quarter of 2013. Despite this, the Philippines is the third fastest growing among the major economies in Asia in this period, next only to China with 7.4 percent and Malaysia with 6.2 percent. The relatively slow growth is expected, given the magnitude of the destruction in production capacity. In agriculture, permanent crops, notably coconuts, were felled. Damage to agricultural output also disrupted supply chains, which may partly explain why food manufacturing output also declined. The tourism and insurance industries likewise slowed down in the first quarter as they are still reeling from the impact of natural calamities last year. Apart from the disasters, prudential lending measures imposed beginnings in the previous quarter to prevent the formation of “real estate bubbles” have also contributed to the slowdown. Private construction was particularly affected by such measures. Nevertheless, Information Technology-Business Process Management (IT-BPM) and the export-oriented manufacturing remained resilient. Post-disaster recovery and reconstruction efforts have also induced growth in logistics, transport, and social work. Growth drivers Overall, on the supply side, the services and industry sectors primarily drove the growth with a contribution of 3.8 and 1.8 percentage points (ppts), respectively, to real GDP growth. Manufacturing remained as the main driver of growth for the industry sector, followed by mining and quarrying. However, agriculture is yet to recover from the devastating effects of last year’s typhoons. All subsectors posted lackluster growth, except forestry,
BSIT-J3T
THE PHILIPPINE ECONOMY (2014)
The Philippine economy grew by 5.7 percent in the first quarter of 2014, even as we continued to feel the lingering effects of the disasters that hit the country during the last quarter of 2013. Despite this, the Philippines is the third fastest growing among the major economies in Asia in this period, next only to China with 7.4 percent and Malaysia with 6.2 percent. The relatively slow growth is expected, given the magnitude of the destruction in production capacity. In agriculture, permanent crops, notably coconuts, were felled. Damage to agricultural output also disrupted supply chains, which may partly explain why food manufacturing output also declined. The tourism and insurance industries likewise slowed down in the first quarter as they are still reeling from the impact of natural calamities last year. Apart from the disasters, prudential lending measures imposed beginnings in the previous quarter to prevent the formation of “real estate bubbles” have also contributed to the slowdown. Private construction was particularly affected by such measures. Nevertheless, Information Technology-Business Process Management (IT-BPM) and the export-oriented manufacturing remained resilient. Post-disaster recovery and reconstruction efforts have also induced growth in logistics, transport, and social work. Growth drivers Overall, on the supply side, the services and industry sectors primarily drove the growth with a contribution of 3.8 and 1.8 percentage points (ppts), respectively, to real GDP growth. Manufacturing remained as the main driver of growth for the industry sector, followed by mining and quarrying. However, agriculture is yet to recover from the devastating effects of last year’s typhoons. All subsectors posted lackluster growth, except forestry,