Economy grows 4.6% in Q3 amid crisis

Gross domestic product (GDP) in the third quarter grew 4.6 percent from a year earlier, despite the global financial crisis, government data showed Thursday.

The economy expanded a seasonally adjusted 0.9 percent in July to September from the second quarter.

The government has revised second quarter GDP growth to an annual 4.4 percent from the previously announced 4.6 percent.

Jonathan Ravelas, chief market strategist, at Banco de Oro Universal Bank said: "This is good and it's better than my forecast of 4.4 percent. Quite unexpected as the quarter was the height of the US financial crisis."

Nicholas Bibby, economist at Barclays Capital said: "It came out better than expected. We've been looking for 4.0 percent (year-on-year). We thought that given the surge in consumer price inflation through the third quarter it would have had a big drag on private consumption.

"Private consumption may be a bit stronger than what we've thought and the government did increase public spending through the third quarter. Overall though, growth is expected to slow. We're looking for GDP growth of around 3.0 percent next year."

The government had forecast third quarter economic growth at 3.8-4.6 percent from a year earlier. Growth is also expected to come in between 4.1 and 4.8 percent this year after it hit 7.2 percent in 2007, a 31-year high.

The International Monetary Fund has cut its 2008 growth forecast for the Philippines to 4.4 percent from 5.2 percent earlier this year.

Inflation, which climbed to a 17-year high of 12.5 percent year-on-year in August, is expected to continue to slow and return to single digits as early as this month, the central bank said.
The Philippines' main economic drivers are exports of electronics and agriculture goods, and domestic demand fuelled largely by remittances from overseas Filipino workers.

Merchandise exports for the first nine months of the year rose 4.04 percent from a year earlier but exports contracted 2.7 percent in September from the same 2007 period.

Rice production on target - 2

Malabanan said field reports reaching his office as of the first week of November showed that an estimated 5.23 million metric tons of palay have been harvested from nearly 1.3 million hectares. That represents 51 percent of the 2.5 million hectares of paddy fields planted during the wet crop. Over 6.7 million metric tons of palay or unhusked rice have been harvested from half of the 2.5 million hectares of lands planted to rice for this wet or main cropping season for the staple.

Ginintuang Masaganang Ani (GMA) Rice Program National Coordinator Dr. Frisco Malabanan said the initial yield report indicates that the Department of Agriculture (DA) could still attain a positive growth in palay production this year.

“Such preliminary yields indicate that the DA can still attain a positive growth palay production this year despite the significant drop in fertilizer use by farmers arising from the 100-percent jump this year in the cost of petrochemical fertilizers,” Malabanan said.

In a report to Agriculture Secretary Arthur Yap, Malabanan said the full-year production forecast of 16.6 million metric tons was based on the combined yields of 10.587 million metric tons in the first three quarters of 2008, which represents a growth rate of 7.22 percent compared to the aggregate volume of 9.874 million metric tons during the same period last year.

The Bureau of Agricultural Statistics showed palay production in the third quarter reached 3.467 million metric tons, a 10.17-percent growth compared to the 2007 yield of 3.146 million metric tons for the same period.In a statement, the Agriculture department said the palay yields were not as high as originally projected for the period because of the 30-percent drop in the application of costly inorganic fertilizers during the wet or main crop, leading to a decline in the per-hectare yields of farmers.

However, despite the decline in fertilizer usage, the Agriculture department managed to offset the potential production losses by increasing by 7 percent the total area planted to palay during the wet cropping season.

Malabanan said field reports reaching his office as of the first week of November showed that an estimated 5.23 million metric tons of palay have been harvested from nearly 1.3 million hectares. That represents 51 percent of the 2.5 million hectares of paddy fields planted during the wet crop.