For the third quarter, the National Statistical Coordination Board (NSCB) announced that “the economy slowed for the third consecutive quarter in the quarter though September, to 3.2 percent from 7.3 percent last year, dragged down by weak public spending, declining exports and low agriculture output due to the recent storms.”
This resulted to a domestic product of only 3.6 percent in the first three quarters from 8.2 percent a year ago.
Compare this to “Indonesia’s 6.5-percent, Vietnam’s 6.1 percent, Singapore’s 6.1 percent, Malaysia’s 5.8 percent, and Thailand’s 3.5 percent. In fact, it was below the 4.6-percent consensus forecast of international and local analysts and the National Economic and Development Authority’s own 3.8-to-4.8-percent forecast.”
What caused this?
NSCB says “The death spiral of debt that hounds our trading partners, the uninvigorating, albeit already expanded government spending, and the decline in fishing due to unfavorable weather and the high cost of fuel contributed to this relatively lethargic growth. As almost always, the Services sector saved the domestic economy from posting an even lower growth. With the downwardly revised second quarter GDP estimate, this puts the growth for the first nine months of 2011 at 3.6 percent, quite a distance even from the lower end of the whole year target of 4.5 percent.”
On the demand side, consumer spending bolstered growth but Construction continued to suffer from the much delayed implementation of the Public-Private Partnership program while Export of Goods really got hit by the global crisis, posting a double digit decline for the first time since the second quarter of 2009.
With the global economy facing grim and gloom, Net Primary Income declined by 3.4 percent cutting the growth of Gross National Income (GNI) from 6.9 percent to 1.6 percent
Looking at National Economic and Development Authority (NEDA) economic report as of November 23, 2011 (shown below), one can clearly see the decline in foreign investments, volume of production is low, lower building permits and decline in agriculture employment.
A Manila Standard editorial adds “.. it is becoming painfully clear that this administration is more interested in chasing down one bed-ridden former President than in creating an environment that is conducive to sustainable economic growth. Under such conditions, how much of a difference will one economic planning secretary make, when the activity he is presumably in charge of carries so little weight with his superiors?”