Economy continues to recover, but growth slowing, says NSCB

MANILA, Philippines –  The economy continued to show signs of recovery – as seen in the positive performance of the composite leading economic indicators or LEI-but growth is slowing down, the National Statistical Coordination Board (NSCB) said yesterday.

The LEI rose for the fifth consecutive quarter but the upswing in the fourth quarter continued the slowdown that was observed in the third quarter, the NSCB said in its report.

The fourth quarter 2010 LEI increased to 0.026 from a revised 0.022 percent in the third quarter of the year, which is the “slimmest rise in the composite LEI” since the fourth quarter of last year.

The number of positive contributors went down to six in the fourth quarter compared to 10 in the third quarter of the year, 11 in the second quarter and nine in the first quarter.

These positive contributors are: tourist arrivals, number of new businesses, foreign exchange rate, stock price index, hotel occupancy rate and electric energy consumption.

The negative contributors, on the other hand are the wholesale price index, terms of trade index, consumer price index, money supply and total merchandise imports.

The negative contributors accounted for 48.5 percent of total contribution.

“The combined share of positive contributors for this quarter consequently dropped to only 51.5 percent from the 79 percent and 100 percent in the third and second quarters, respectively,” the NSCB said.

According to the NSCB, the LEI system involves the study of the behavior of indicators that consistently move upward or downward before the actual expansion or contraction of overall economic activity.

“The system is based on an empirical observation that the cycles of many economic data series are related to the cycles of total business activity,” it said.