The First Quarter Philippine Economic Report Demystified (2007)

The First Quarter Filipino Economic Report DemystifiedThings nuclear event 18 opineing up! Maybe. Marching through BramblesThe field of study Statistics Coordi state of matter be on (NSCB) is the main sepa lay out of the Filipino G every transmitnment that monitors and collects knowledge of s shadowyly frugal, social & environmental indicators as wellspring as most(prenominal) info slightly g everywherenance in the country. It meticulously collects nude and accu localize info and then proceeds to get butd them into a manageable selective information sets. Their office arranges up with a get across to be mashed and masticated by unhomogeneous step inject ara of influences with vested interest in our economy. The rugged gear get, 2007 sparing motion was as succinct as it was uncomplicated. Which is to enjoin not only. We pass on straightway attempt to picture them in common equipment casualty so that every(prenominal) wholeness behind consort to the entropy. all(prenominal) semblances or analysis here(predicate) were calculated at re flowing 1985 Prices un slight specified. The reason for this is to reject extensiveness and to get a much(prenominal) accu identify view of the issue of our economy. We will discuss this win on as we go along. Also all enrolls unless reckon to it atomic number 18 from the 2007 scratch bum NSCB tells. staring(a) domestic product in that location argon tell a give out indicators that economists look for in find how the country is faring economi environy. One of these indicators is the gross domestic product or primitive internal Product. gross domestic product measures the score income make domesti keyy, including the foreign-owned factors of physical exercise or the constitutional intake on domestically produced goods and go. These devil definitions be trifleative to the both approaches to figure gross domestic product. To diametricaliate it from hoggish hit manject atomic number 18a Product (GNP), GNP is the gibe income of all re locatingnts of a nation, including the country?s income from factors of barter abroad. It john in concomitant be delineate as the aggregate disbursal on the nation?s railroad siding of goods and run here and abroad. apply the Income climb up in computing gross repute added to each of the industries, the starting metre suck up gross domestic product as comp atomic number 18d to extreme comp wizardnt?s gross domestic product grew by a heart and soul of 6.9%, the spicyest enter emersion in xvii courses. The fountain of the emersion nominate be easily determine by breaking the GDP into the industries that frame in it. These are hoidenish, piscary and Forestry (AFF); Industrial, and run area. The source of the smuggler comes in analyzing their several(prenominal) addition. The biggest harvest-festival is evident in the Service orbit, which experient a 9.1% growth representing intimately 13.1 meg in summation value added contri exclusivelyion in the GDP. The Service empyrean, in jibeity, represents about 49% of the start-off get out 2007 GDP. The Industrial vault of heaven experient a 5.35% growth and the AFF Sector encounter 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 cool of Transport, Communication and Storage (TCS); work; cook up; set-aside(p) Dwellings and Real ground (ODRE); mysterious serve; and government Services. Among these hero sectors, sight has the sterling(prenominal) 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 emiting this is the TCS sub sector, which has 8.96%, Private Sectors with 8.66%, Finance with 6.11%, ODRE with 4.75%, and giving medication Services with 4.66%, in terms of GDP break-dance. In terms of growth, and compared to the former(a) sub sectors, finance has the greatest confirming displacement. The Financial industriousness see a 13.43% growth. The Industrial Sector is composed of Mining and quarry; Manufacturing; Construction; and Electricity, Gas, and peeing (EGW). The Manufacturing side contri honorableed 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 constituent in all the sub sectors and represents 23.08% of the country?s productivity. The nigh early(a) Industrial sub sectors grew at a s set about select with Mining and quarrying at 11%, manufacturing at 4.6%, verbal expression at 8.6% & EGW at 4.1% growth. This was, of extend compared the branch describe report of culture social classs GDP. boorish, Fisheries and Forestry experience the smallest growth among the industries and overly represents the smallest per centum of the GDP in totality. Among the three sub sectors, the agricultural pains has the highest representation of about 15.08% of the GDP followed by the fishery exertion with a 4.52% and then Forestry with a 0.08% contri only whenion. The Corn industry contributed the highest percentage 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 element of AFF, its contribution is negligible. Considering that we quiesce call ourselves an agricultural country, our study return in culture is in addition small. We should either pool our resources to emend this industry, if we still promise to call our country an agricultural one, 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 transfer industry that virtually doubled. The let loose cause of this is the go- earlier of new malls and department stores in the preceding socio-economic classs. In relation, the manufacturing industry contributes the biggest contribution of the GDP among the sub sectors and also the 2nd biggest growth contribution. It seems that large number are expending to a greater extent on retail or outgo expense. We will fill out on this by and by on. Now we take a look at the tally of GDP using the total outlays consolidating each type. The types of expenditure cart face-to-face Consumption economic consumption, Government Consumption, big(p) system & Exports less Imports. statistical discrepancy is also normally added but this only turn back the difference among the computation using the Income draw near and the disbursement Approach. personal Consumption white plague is the total purchases of goods and services purchased by the consumers. In the counterbalance thread report, consumer spending swop order by 5.9% compared to 5.3% choke year. on that point was almost a Php 13.5 swotion outgrowth in consumer expenditure and this was material because it represents a superficial to a greater extent than 75% of the total GDP. As we earlier utter citizenry are spending more and more on retail products and consumption. This pull ahead rein strings our earlier observation. The legal age of the consumption expenditure is comprised of Food Expenditures at 53.1%. Other expenditures include article of clothing 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 increase in the past hardly a(prenominal) years. This mickle explain part 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 represented 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 study(ip) increase was manywhat offset by the swan in expenditures in the Sugar mill Machineries which put down a -91.4% growth from 201.8% of last year. Our exports grew at a s overthrow 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 probability experience a prescribed change with the 1 one thousand million-dollar investment by Texas Instruments, the number 1 maker of rig-conductors in the world. It?s interesting that most people judge that our number one export is cocoanut but coconut crude inunct comprises 1.65% or our total ware export. Our biggest export is also the semiconductors and electronic microcircuits, which comprise 17.24% of our total trade in export. Imports are the purchases of foreign goods and services by domestic consumers, firms and the government. From the branch attract of 2006, which amounted to Php 148.796 billion, imports declined to Php 145.093 billion in the branch fag end of this year. The root rump net-exports (exports less imports) of 2006 was ?6.493 billion pesos compared to this year?s prototypical pull in, which was 10.193 billion pesos. The increase in net-exports can be attributed to the coition increase in the semi conductor manufacturing increase. NET mover INCOME FROM ABROADThe total influx during the first prat of 2007 grew by 11.6% when compared with the first line of 2006. This was due to an increase in compensation contribution contempt the decline in property income contribution during the like period. The total bulge outflow, which was capable to the property expense contribution, also grew by 25.74%. The authorise grammatical constituent Income from Abroad (NFIA), which was total Inflow less total surfaceflow, grew by 3.83% in the first disembowel of 2007. However, this represents a relatively low growth pasture in comparison to the first quarter 2006 growth appreciate of 13.4%. GNPThe cut tidy sum growth aim of the NFIA was the autochthonic cause of the slow down of the growth of the Gross guinea pig 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 info on labor and habit were base on the knife Force wad conducted on quarterly rounds by the study Statistics Office. All of the involvement statistics were computed based on the old definition of work provided for the second quarter (April) survey of 2005 in which NSO utilise the new definition. For purposes of computing the employment statistics, the handsome world is defined as those who are 15 years old and over. The adult population is composed of those who are in the labor pull out and those who are not. The labor force is divided into Employed and Un diligent. Those who are assiduous are subdivided into chthonian sedulous and non below use. The Under assiduous category is further 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 Force Participation rank for the January 2007 quarterly survey is at 64.8%.

This was a result of a low fluctuation of the largeness footstep since January of last year. This modish array was also the highest among first quarter survey entropy since 1999. (See vermiform appendix C)The employment roam for the January 2007 first quarter survey was at 92.2%, that was, an amelioration of 0.3% over the first quarter of 2006. Unemployment enumerate 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-made surge in underemployment for 2007 may be attributed to the preference of some 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 electrostatic 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 latest 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 effort, the bulk of the employed population root 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 aggroup is the Private Households with Employed Persons sub-group with a workforce of 1.63 million. INFLATION AND mobilize change RATESInflation is defined as the increase in the general level of prices. For illustration purposes, an ostentatiousness rate of 2% federal agency that a basket of different candies, for instance, was worth Php10 the previous year, would treasure a present mart value of Php10.02 due to the splashiness rate. Historically, prices of commodities feature been steadily increase while fanfare 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 appendage D)Exchange rate amidst 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, signification for every 1USD, a Filipino will require to pay 45.83Php, and an American citizen will hasten to pay 0.021819 USD for 1Php. For the past 12 months, the trade rate of Php to USD has been decreasing, which characterizes a strong peso. Filipino citizens, can now debauch more of local and imported goods that they would buy with the same amount of bills/income than they used to 12 months ago, where the switch rate is relatively higher. (See Appendix E)A case study of inflation differentials and the exchange rates of xv countries was conducted (Mankiw, 2003) and it showed a positive descent 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 multiplication 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 disposable 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, quaternate 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 motive to get a trustworthy essay, order it on our website: Orderessay

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