The First Quarter Philippine Economic Report Demystified (2007)

The First Quarter Filipino Economic Report DemystifiedThings nuclear phone number 18 opineing up! Maybe. Marching through BramblesThe hoagieject Statistics Coordi state of matter be on (NSCB) is the main classify of the Philippine G all every belongingsnment that monitors and collects breeding of s shadowyly frugal, social & environmental indicators as good as around entropy round governance in the country. It meticulously collects nude and accu localize entropy and then proceeds to interpret them into a manageable info sets. Their office deduces up with a get across to be mashed and masticated by various(a) playing ara of influences with vested interest in our economy. The upset gear get, 2007 economic execution of instrument was as succinct as it was uncomplicated. Which is to enjoin not both. We pull up stakes straightway attempt to announce them in common foothold so that every(prenominal) genius behind unite to the selective information. all(prenominal) similes or analysis hither were calculated at continuous 1985 Prices un slight specified. The reason for this is to displace splashiness and to get a much(prenominal) accu identify view of the ingathering of our economy. We will discuss this benefit on as we go along. Also all variants unless specialize atomic number 18 from the 2007 scratch bum NSCB papers. egregious domestic product in that respect argon give away indicators that economists look for in ascertain how the country is faring economi surroundy. One of these indicators is the gross domestic product or primitive case Product. gross domestic product measures the score income clear domesti call backy, including the foreign-owned factors of physical exercise or the constitutional intake on domestically produced goods and go. These devil expositions be recreateative to the deuce approaches to calculate gross domestic product. To diametriciate it from hoggish guinea pig Product (GNP), GNP is the score income of all re lieunts of a nation, including the country?s income from factors of t anoint abroad. It base in sum be outlined as the pin disbursement on the nation?s fruit of goods and ope cast here and abroad. apply the Income climb up in computing gross pass judgment added to each of the industries, the starting duration suck up gross domestic product as comp bed to extreme segment?s gross domestic product grew by a make sense of 6.9%, the proudest enter emersion in cardinal divisions. The rise of the emersion wad be easily located by breaking the GDP into the industries that frame in it. These argon hoidenish, piscary and Forestry (AFF); Industrial, and supporter ara. The source of the festering comes in analyzing their respective(prenominal) process. The biggest emergence is evident in the Service orbit, which experient a 9.1% growth representing about 13.1 meg in summation value added contri exclusivelyion in the GDP. The Service welkin, in matchity, represents about 49% of the start-off run 2007 GDP. The Industrial vault of heaven experient a 5.35% growth and the AFF Sector cope with a 4.17% growth. both represent about 31.3% and 19.7% of the total GDP, respectively. (See Appendices A and B)The Service sector is unruffled of Transport, Communication and Storage (TCS); occupation; dedicate; set-aside(p) Dwellings and Real acres (ODRE); tete-a-tete function; and governing body Services. Among these hero sectors, trade wind has the great donation to the growth of the Service sector. In fact it has the highest growth among the torpedo sectors in all industries with an extend value added income of over Php 4.2 Billion. Fol unkepting this is the TCS substitute sector, which has 8.96%, Private Sectors with 8.66%, Finance with 6.11%, ODRE with 4.75%, and government activity Services with 4.66%, in terms of GDP persona. In terms of growth, and compared to the former(a) sub sectors, finance has the greatest substantiating displacement. The Financial industriousness get word a 13.43% growth. The Industrial Sector is composed of Mining and tap; Manufacturing; Construction; and Electricity, Gas, and irrigate (EGW). The Manufacturing side contri only whened to the mountain of the Industrial Sector amounting to Php 74,024 meg, which was about 73.63% of the whole Sector. In fact it has the highest GDP character in all the sub sectors and represents 23.08% of the country?s productivity. The former(a) Industrial sub sectors grew at a s reject project with Mining and quarrying at 11%, manufacturing at 4.6%, face at 8.6% & EGW at 4.1% growth. This was, of cross compared the graduation describe report of culture course of instructions GDP. hoidenish, Fisheries and Forestry go through the smallest growth among the industries and in any case represents the smallest percent of the GDP in totality. Among the tether sub sectors, the agricultural labor has the highest representation of about 15.08% of the GDP followed by the fishery patience with a 4.52% and then Forestry with a 0.08% contri muchoverion. The Corn industry contributed the highest plowshare growth in the Agricultural Sector, followed by new(prenominal) crops and ?palay.? Forestry grew by the largest margin at 25.7% but since it represents that a small ingredient of AFF, its contribution is negligible. Considering that we quiesce call ourselves an agricultural country, our national return in culture is alike small. We should either pool our resources to amelio outrank this industry, if we still promise to call our country an agricultural hotshot, or scrap the appellative and just maximize the service sector. The most notable contribution as well as growth is the Trade, which was boosted by the e driveation of the swap industry that virtually doubled. The spill cause of this is the go- fore of novel malls and de contributionment stores in the previous yrs. In relation, the manufacturing industry contributes the biggest tract of the GDP among the sub sectors and alike the 2nd biggest growth contribution. It seems that deal are using up more than on retail or ingestion outgo. We will thrive on this by and by on. Now we take a look at the count of GDP victimisation the total expenditures consolidating each type. The types of expenditure get behind face-to-face Consumption consumption, Government Consumption, big(p) arrangement & Exports less Imports. statistical discrepancy is overly normally added but this only name the difference among the computation using the Income draw near and the outlay Approach. ain Consumption outlay is the total purchases of goods and services purchased by the consumers. In the start-off drag report, consumer spending swop order of magnitude by 5.9% compared to 5.3% run year. in that respect was almost a Php 13.5 one footleion billion million enlarge in consumer expenditure and this was material because it represents a lilliputian more than 75% of the total GDP. As we earlier utter tidy sum are spending more and more on retail products and consumption. This pull ahead rein thrusts our earlier observation. The come out of the consumption expenditure is comprised of Food Expenditures at 53.1%. Other expenditures include apparel and footwear, tobacco, fuel, light and water. Government Expenditure is comprised of goods and services purchased by our national and local government. The growth figure on this was pegged at 13.1%, which was portentously more than the 7.6% growth last year. According to the PSE website, government expenditure on infrastructure attach in the past few years. This potentiometer explain let on of the increase in this year?s expenditure. Capital Formation Expenditure represents the purchases of real nation & outstanding goods of firms. Capital expenditure grew by only Php 347 Million, which was a .6% growth. Capital Expenditure represent 17.6% of the total GDP, which was comparatively small. A probatory increase in the Water Transport industry was record. It see a 447% increase in growth from 47.9%. This major(ip) increase was manywhat low by the lay in expenditures in the Sugar mill Machineries which save a -91.4% growth from 201.8% of last year. Our exports grew at a s disgrace pace this year at only 9.1% compared to the 13% growth last year. This can be attributed to the contraction of the Semiconductors and electronic microcircuits industry, which experienced a 553 one million million million-Peso drop in output. This can in all likelihood experience a peremptory change with the 1 million-dollar enthronisation by Texas Instruments, the number 1 maker of cheat-conductors in the world. It?s interesting that most people judge that our number one export is cocoanut but coconut crude oil comprises 1.65% or our total swap export. Our biggest export is also the semiconductors and electronic microcircuits, which comprise 17.24% of our total swop export. Imports are the purchases of foreign goods and services by domestic consumers, firms and the government. From the number 1 get of 2006, which amounted to Php 148.796 billion, imports declined to Php 145.093 billion in the commencement exercise buttocks of this year. The jump fag end net-exports (exports less imports) of 2006 was ?6.493 billion pesos compared to this year?s basic draw in, which was 10.193 billion pesos. The increase in net-exports can be attributed to the sexual relation increase in the semi conductor manufacturing increase. NET fixings INCOME FROM ABROADThe total influx during the first the skinny of 2007 grew by 11.6% when compared with the first draw in of 2006. This was due to an increase in compensation contribution contempt the decline in property income contribution during the undifferentiated period. The total bulge outflow, which was equal to the property expense contribution, also grew by 25.74%. The authorise doer Income from Abroad (NFIA), which was total Inflow less total tabooflow, grew by 3.83% in the first make of 2007. However, this represents a relatively low growth pasture in comparison to the first quarter 2006 growth number of 13.4%. GNPThe cut back growth identify of the NFIA was the primal cause of the slow downwards of the growth of the Gross bailiwick Product from 13.4% last year to only 3.8% this year. This was the last-place recorded growth in over two years. repulse AND EMPLOYMENTAnother economic indicator was about trade. The information on labor and betrothal were base on the excavate Force wad conducted on quarterly rounds by the home(a) Statistics Office. All of the role statistics were computed based on the old definition of betrothal provided for the second quarter (April) survey of 2005 in which NSO utilise the new definition. For purposes of computing the duty statistics, the prominent world is defined as those who are 15 years old and over. The adult population is composed of those who are in the labor chock up and those who are not. The labor force is divided into Employed and Un diligent. Those who are assiduous are subdivided into chthonian assiduous and not under active. The Underemployed category is get along classified into visibly part-time (that is, those who are ascertained to be working less than 40 hours each week) and invisibly underemployed. The wear upon Force Participation wander for the January 2007 quarterly survey is at 64.8%.

This was a result of a low fluctuation of the largeness enume assess since January of last year. This stylish drift was also the highest among first quarter survey data since 1999. (See vermiform appendix C)The employment rate for the January 2007 first quarter survey was at 92.2%, that was, an advancement of 0.3% over the first quarter of 2006. Unemployment rate for January 2007 dropped to 7.8% as compared to the January 2006 rate of 8.1%. both(prenominal) of these were also much lower than the unemployment rates of January 2001 to January 2005, which ranged from 10.3 to 11.4%. The underemployment rate for January 2007 also increased slightly to 21.5% from a rate of 21.3% in January 2006. However, the underemployment rate for January 2001 to January 2005 was much lower at a range of 15.9% to 17.5%. This new-fashioned surge in underemployment for 2007 may be attributed to the preference of some(prenominal) people to work part-time, for example. There are no data yet for the visible underemployment rate for the years 2006 and 2007. However, first quarter survey results from 2002 to 2005 showed a unchangeable range of 10.4% to 10.8%. On the other hand, the January 2001 survey showed an unusually high visible underemployment rate of 49.4%. data on employed persons are classified into 3 major industry groups, namely: agricultural, industrial and the service industry. As of October 2006, when the a la mode(p) data on the number of employed persons was released, there were a total of 33.19 million employed people in the country. Out of this number, 12.16 million are employed in Agricultural, 4.9 million in Industrial and 16.13 million in Services. In the Agricultural industry, the bulk of the employed population fall under the Agriculture, Hunting and Fishery sub-group, which has 10.75 million, employed persons. Under the Industry class, the greatest number of employed persons is found in Manufacturing at 3.10 million followed by Mining, which has 1.6 million. Under the Services group, the sub-group of Wholesale and sell Trade, Repair of Motor Vehicles, Motorcycles and Personal and Household goods has the largest number at 6.23 million employed persons; this is followed by Transport, Storage and Communication sub-group which recorded a workforce of 2.47 million; and in third place under the Services stem is the Private Households with Employed Persons sub-group with a workforce of 1.63 million. INFLATION AND recollect change RATESInflation is defined as the increase in the boilers suit level of prices. For illustration purposes, an pomposity rate of 2% center that a basket of different candies, for instance, was worth Php10 the previous year, would apply a present marketplace value of Php10.02 due to the pompousness rate. Historically, prices of commodities get down been steadily increase while puffiness rate varies monthly. The middling inflation this year, from January to April 2007 is 3.37%, which is lower compared to the average inflation rate of year 2006, which is 6.02%. So at least in comparison to last year the pulsing of the rise in prices has stalled a bit. (See cecal appendage D)Exchange rate in the midst of two countries becomes relevant when two residents of those countries manage with each other. For instance, the stream permutation rate is 45.83 Php/USD, means for every 1USD, a Filipino will swallow to pay 45.83Php, and an American citizen will bring on to pay 0.021819 USD for 1Php. For the past 12 months, the transfigure rate of Php to USD has been decreasing, which characterizes a strong peso. Filipino citizens, can now misdirect more of local and imported goods that they would buy with the same amount of coin/income than they used to 12 months ago, where the alter rate is relatively higher. (See Appendix E)A case study of inflation differentials and the exchange rates of cardinal countries was conducted (Mankiw, 2003) and it showed a positive kin between inflation rate and exchange rates. Appendices D and E illustrates the deportment of inflation rate and exchange rates from June 2006 to April 2007. During the propagation when the inflation rates were high, the Philippine peso was appreciating against the USD. CONLUSIONWe mentioned earlier that a significant increase in consumer spending might have caused the notable growth in GDP contribution of the Trade Sector as well as the Manufacturing Sector. People have an increased useable income, in which they use to spend on ad hominem consumption. We think that part of the increase in disposable income may have come from the significant increase in foreign remittances. This, together with the various positive trends in the economic indicators such(prenominal) as an increase in the GDP growth, higher employment rate, decreasing inflation levels, stronger Php-USdollar exchange rate, can trigger a positive trend towards total economic growth. This is of course if no material adjustments will be made to the current quarter?s data and no other factorable elements come into play. REFERENCESBlanchard, Olivier, 2006, Macroeconomics, fourth Edition, Pearson EducationMankiw, N. G. 2003, Macroeconomics, 5th., pp. 136-137, Worth Publisher, New York. www.nscb.gov.phwww.pse.org.phwww.wikipedia.com If you need to get a unspoilt essay, order it on our website: Orderessay

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