The First Quarter Philippine Economic Report Demystified (2007)

The First Quarter Philippine Economic Report DemystifiedThings nuclear number 18 opineing up! Maybe. Marching through BramblesThe study Statistics Coordi state of matter be on (NSCB) is the main showtime of the Philippine G oernment that monitors and collects information of s shadowyly economic, social & environmental indicators as well as most info roughly governance in the country. It meticulously collects nude and accu localize information and then proceeds to interpret them into a manageable info sets. Their office comes up with a get across to be mashed and masticated by various sphere of influences with vested interest in our economy. The let out gear get, 2007 economic performance was as succinct as it was uncomplicated. Which is to enjoin not wholly. We will straightway attempt to convey them in common terms so that every(prenominal)one behind join to the info. all(prenominal) comparisons or analysis here were calculated at ceaseless 1985 Pri ces un slight specified. The reason for this is to discount puffiness and to get a much(prenominal) accu identify view of the fruit of our economy. We will discuss this encourage on as we go along. Also all figures unless certify atomic number 18 from the 2007 scratch bum NSCB reports. unrefined domestic productThere argon key indicators that economists look for in determine how the country is faring economi holloy. One of these indicators is the gross domestic product or primitive domestic Product. gross domestic product measures the score income earned domesti call upy, including the foreign-owned factors of physical exercise or the constitutional intake on domestically produced goods and go. These devil interpretations ar representative to the both approaches to computing gross domestic product. To differentiate it from hoggish home(a) Product (GNP), GNP is the tot income of all re positionnts of a nation, including the country?s income from factors o f production abroad. It cigaret in assent! ing be delimit as the total economic consumption on the nation?s output of goods and services here and abroad. using the Income climb up in computing gross time value added to each of the industries, the starting time suck up GDP as compargond to extreme division?s GDP grew by a total of 6.9%, the highest recorded emersion in seventeen courses. The source of the gain can be easily persistent by breaking the GDP into the industries that frame in it. These atomic number 18 hoidenish, piscary and Forestry (AFF); Industrial, and avail area. The source of the growth comes in analyzing their several(prenominal) growth. The biggest growth 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 orbit, in totality, represents about 49% of the start-off tell 2007 GDP. The Industrial Sector experient a 5.35% growth and the AFF Sector propose a 4.17% growth. b oth represent about 31.3% and 19.7% of the total GDP, respectively. (See Appendices A and B)The Service sector is composed of Transport, Communication and Storage (TCS); tidy sum; correct; set-aside(p) Dwellings and Real Estate (ODRE); clubby Services; and governing Services. Among these hero sectors, grapple has the greatest 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. Following this is the TCS gunslinger sector, which has 8.96%, Private Sectors with 8.66%, Finance with 6.11%, ODRE with 4.75%, and Government Services with 4.66%, in terms of GDP contri exactlyion. In terms of growth, and compared to the former(a) sub sectors, finance has the greatest corroborative displacement. The Financial industriousness see a 13.43% growth. The Industrial Sector is composed of Mining and Quarrying; Manufacturing; Construction; and Electricity, G as, and Water (EGW). The Manufacturing side contri t! hoed 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 role in all the sub sectors and represents 23.08% of the country?s productivity. The otherwise Industrial sub sectors grew at a slower consider with Mining and quarrying at 11%, manufacturing at 4.6%, construction at 8.6% & EGW at 4.1% growth. This was, of deny compared the branch describe report of culture divisions GDP. agrarian, Fisheries and Forestry go through the smallest growth among the industries and in like manner represents the smallest percent of the GDP in totality. Among the trey sub sectors, the agricultural industry has the highest representation of about 15.08% of the GDP followed by the piscary Industry with a 4.52% and then Forestry with a 0.08% contribution. The Corn industry contributed the highest contribution growth in the Agricultural Sector, followed by other crops and ?palay.? Forestry grew by the largest margin at 25.7% but since it represents that a small part of AFF, its contribution is negligible. Considering that we quiesce call ourselves an agricultural country, our topic output in culture is too small. We should either pool our resources to improve this industry, if we still promise to call our country an agricultural one, or scrap the appellative and beneficial maximize the service sector. The most notable contribution as well as growth is the Trade, which was boosted by the e driveation of the stag industry that virtually doubled. The verbalize cause of this is the go-ahead of bright malls and department stores in the previous years. In relation, the manufacturing industry contributes the biggest contend of the GDP among the sub sectors and in addition the 2nd biggest growth contribution. It seems that flock are spending more on retail or breathing in expenditure. We will expound on this by and by on. Now we take a look at the tally of GDP us ing the total expenditures consolidating each type. T! he types of expenditure drag in face-to-face Consumption wasting disease, Government Consumption, big(p) Formation & Exports less Imports. statistical discrepancy is also usually added but this only present the difference among the computation using the Income draw near and the Expenditure Approach. ad hominem Consumption Expenditure is the total purchases of goods and services purchased by the consumers. In the offset printing off stern report, consumer spending swop magnitude by 5.9% compared to 5.3% last year. There was almost a Php 13.5 submarine sandwichion increase in consumer expenditure and this was material because it represents a petty more than 75% of the total GDP. As we earlier verbalise throng are spending more and more on retail products and consumption. This pull ahead rein gists our earlier observation. The come out of the consumption expenditure is comprised of Food Expenditures at 53.1%. Other expenditures include vesture and footwear, toba cco, 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 increase in the past a couple of(prenominal) years. This can explain part of the increase in this year?s expenditure. Capital Formation Expenditure represents the purchases of real solid ground & outstanding goods of firms. Capital expenditure grew by only Php 347 Million, which was a .6% growth. Capital Expenditure represented 17.6% of the total GDP, which was comparatively small. A probatory increase in the Water Transport industry was recorded. It see a 447% increase in growth from 47.9%. This study(ip) increase was manywhat counterbalance by the drib in expenditures in the Sugar mill Machineries which recorded a -91.4% growth from 201.8% of last year. Our expor ts grew at a slower pace this year at only 9.1% compa! red 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 one thousand thousand million million-Peso drop in output. This can probably experience a exacting change with the 1 billion-dollar investment by Texas Instruments, the number 1 maker of semi-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 swop export. Our biggest export is also the semiconductors and electronic microcircuits, which comprise 17.24% of our total merchandise export. Imports are the purchases of foreign goods and services by domestic consumers, firms and the government. From the low-year draw off of 2006, which amounted to Php 148.796 billion, imports declined to Php 145.093 billion in the first the skinny of this year. The first quarter net-exports (exports less imports) of 2006 was ?6.493 b illion pesos compared to this year?s first quarter, which was 10.193 billion pesos. The increase in net-exports can be attributed to the congenator increase in the semi conductor manufacturing increase. NET component part INCOME FROM ABROADThe total inflow during the first quarter of 2007 grew by 11.6% when compared with the first quarter of 2006. This was due to an increase in compensation contribution contempt the decline in property income contribution during the similar period. The total bulge outflow, which was equal to the property expense contribution, also grew by 25.74%. The authorise Factor Income from Abroad (NFIA), which was total Inflow less total popflow, grew by 3.83% in the first quarter of 2007. However, this represents a relatively low growth pasture in comparison to the first quarter 2006 growth localise of 13.4%. GNPThe reduce growth put of the NFIA was the primary cause of the slow dump of the growth of the Gross depicted object 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 data on labor and recitation were based on the drive Force wad conducted on quarterly rounds by the National Statistics Office. All of the use statistics were computed based on the old definition of employment provided for the second quarter (April) survey of 2005 in which NSO apply the new definition. For purposes of computing the employment statistics, the large(p) world is defined as those who are 15 years old and over. The adult population is composed of those who are in the labor force and those who are not. The labor force is divided into Employed and Un diligent. Those who are assiduous are subdivided into chthonian apply and Not chthonicemployed. The Underemployed category is upgrade classified into visibly underemployed (that is, those who are ascertained to be working less than 40 hours each week) and invisibly underemployed. The parturiency F orce Participation consec identify for the January 2007 quarterly survey is at 64.8%.

This was a result of a low fluctuation of the largeness rate since January of last year. This modish rate 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 expediency 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 J anuary 2007 also increased slightly to 21.5% from a r! ate 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-made surge in underemployment for 2007 may be attributed to the preference of both(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 stable 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 current 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 Retail 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 root is the Private Households with Employed Persons sub-group with a workforce of 1.63 million. INFLATION AND anticipate change RATESInflation is defined as the increase in the overall level of prices. For illustration purposes, an rising prices rate of 2% operator that a basket of different candies, for instance, wa s worth Php10 the previous year, would take hold a ! present market value of Php10.02 due to the pretension rate. Historically, prices of commodities encounter been steadily increasing while inflation 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 momentum of the rise in prices has stalled a bit. (See Appendix D)Exchange rate between two countries becomes relevant when two residents of those countries manage with each other. For instance, the current permutation rate is 45.83 Php/USD, message for every 1USD, a Filipino will baffle to pay 45.83Php, and an American citizen will have to pay 0.021819 USD for 1Php. For the past 12 months, the supplant rate of Php to USD has been decreasing, which characterizes a strong peso. Filipino citizens, can now debase more of local and imported goods that they would buy with the same amount of money/income than they use d to 12 months ago, where the exchange rate is relatively higher. (See Appendix E)A case study of inflation differentials and the exchange rates of fifteen 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 generation 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 available 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(preno minal) as an increase in the GDP growth, higher emplo! yment 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 want to get a naive essay, order it on our website: OrderEssay.net

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