The Philippine economy grew by 3.7% in Q4

According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest Newsbriefs, a weekly digest produced by IDEA, Inc. to highlight the most recent national and international economic events, the Philippine grew 3.7 percent in the last quarter of 2011. For the whole year, the economy expanded 3.7 percent down from 7.6 percent in 2010. The higher spending in the last quarter of 2011 cushioned the economy from the European debt crisis, weak US economic recovery and the many typhoons that hit the country.

Furthermore, it was reported by IDEA that on the demand side, consumer spending doubled up to 6.1 percent in 2011 from about 3.4 percent, but it was not sufficient to offset the decline in global trade and moderation in investments. In the last quarter, household consumption increased by 6.7 percent while the huge recovery from construction at 11.4 percent were partly negated by the decline in continued drop in exports and reduced addition to inventory.

Likewise, per same published report, the Bangko Sentral ng Pilipinas reported that funds in the special deposit accounts increased by 3 percent to Php1.633 trillion from Php1.268 trillion in the first week of January 2011. The SDA’s are pegged at the central bank’s overnight borrowing rate of 4.25 percent. Government revenues increased at the fastest pace in over a decade. The collections grew 13 percent to Php1.365 trillion in 2011 from Php1.208 trillion in 2010. The Bureau of Customs has yet to release its final Cash Operation report, but estimates that it took in Php266 billion, roughly Php50 billion short of the Php320 billion target. The government is targeting to collect Php1.56 trillion.

 Moreover, the Philippine peso could further strengthen due to the Federal Reserve’s promise to keep low interest rates until at least 2014 to support the recovery of the US economy. The peso surged to 42.5 centavos to Php42.85 per dollar. Funds are expected to look for higher returns in emerging countries like the Philippines. The Philippine economy grew by 3.7 percent in 2011—quite well in the forecast of analysts. The fourth quarter GDP growth in 2011 is 3.7 percent, above the 3.6 percent from the third quarter. The plunge in the public spending declined 29.4 percent for the full year. The service sector was the main driver increasing by 5 percent for the full year.

On the other hand, the Business Processing Outsourcing (BPO) is expected to reach its US$ 11 billion target revenue last year. The target represented an increase of about 22 percent from US$ 9 billion in 2010. for this year, the sector is expected to grow at least 20 percent. The optimistic outlook came amid pending bill in the US Congress that seeks to discourage outsourcing.

Lastly, according to the Social Weather Stations, the number of poor people became less, but more people went hungry. Self-rated poverty plunged to 45 percent from 52 percent based on Dec 3-7 poll of the SWS. Moreover, about 22.5 percent of the respondents claimed to have nothing to eat from September’s 21.5 percent. The SWS’ December poll utilized face-to-face interviews of 1,200 adults nationwide, according to IDEA.

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