Rising prices, US slowdown pull down RP growth
By Jesus F.Llanto
Researcher, Newsbreak
May 29, 2008-Rising fuel and food prices, a slowdown in the United States economy and the negative effects of a stronger peso slowed down the growth of Philippine economy in the first quarter to 5.2 percent from last year’s 7 percent, officials announced Thursday.
They said the figure is within the government’s expected growth range of 5.2-6.2 percent in Gross Domestic Product (GDP) for the first quarter.
“The external sector continues to struggle in an environment characterized by high oil prices and weak global demand,” Economic Planning Secretary Augusto Santos said Thursday.
The National Economic and Development Authority (NEDA) lowered yesterday the official economic growth target for 2008 from 6.3 to 7 percent to between 5.7-6.5 percent.
Gross National Product (GNP), meanwhile, expanded by 7.3 percent as a result of the 30.3 percent increase in the country’s net factor income from abroad (NFIA), 89 percent of which are remittances from overseas Filipino workers.
Service sector
Of all the sectors, the services sector remained the strongest and registered a 6.9 percent growth. The figure is lower than last year’s 8.4 percent growth and contributed to 3.3 percentage points in the GDP. Santos said the “healthy” growth was driven by real estate, finance and trade.
“The real estate sub-sector continues to be buoyed by demand for office space as well as residential spaces from OFWs,” Santos said.
Growth in the agriculture sector, which contributed 0.6 percentage points in the GDP, slowed down to 3 percent from last year’s 4 percent.
Santos said the higher output of palay, corn, banana, coconut and poultry and the increasing demand in agricultural-based exports drove the growth in this sector. –with reports from Reuters and ABS-CBN News. (abs-cbnNews.com/Newsbreak)
