Signals

The Philippine economy surprisingly posted its strongest growth in 14 quarters during the first three months of 2004, led by agriculture’s fastest growth rate in 15  years and driven by the highest pace of expansion in consumer spending in 15 1/2  years. Above official and private sector expectations, the GDP growth rate             accelerated to 6.4 percent in the first quarter - from 4.8 percent in the same period             last year - faster than the GNP growth rate, which stepped up to 6.2 percent from             4.6 percent.

The country’s inflation rate using the 1994 base year reached a 30-month high of 4.5 percent last May on account of rising food and fuel prices. Average inflation rate rose to 3.8 percent in the first five months from 2.8 percent in the same period a year ago.

Investments approved by the Philippine Economic Zone Authority (PEZA) jumped 177.4 percent to P23.8 billion in the first five months from P8.6 billion in the same period last year. The number of PEZA-approved projects rose 35.3 percent to 115 from 85 last year. Investments in information technology increased 129.3 percent.             Among the recent IT locators registered with PEZA were the P628.1 million             business process outsourcing unit of Shell Shared Services (Asia) BV, the P311.1             million ecozone enterprise of Clientlogic Philippines, and the P136.4 million call             center of E-Telecare International.


Tourist arrivals in the Philippines rose 24.2 percent to 771,569 in the first four months from 620,966 in the same period a year ago. US, Japanese, and Korean nationals constituted more than half of the visitors for the period. On the other hand, the fastest-growing source of visitors to the Philippines among the top ten             economies were Hong Kong, Taiwan, and Australia.

The country’s exports rose 6.9 percent to US$12.2 billion in the first four months from US$11.4 billion. Exports to Japan significantly improved, jumping 28.4 percent, as demand for electronics recovered. Exports to other traditional markets – Netherlands, Hong Kong, Singapore, China, and Germany – likewise posted             double-digit growths. Electronics continued to be the country’s top dollar earner,             rising 5.6 percent and accounting for half of the country’s exports. On the other             hand, export volume of the country’s other leading merchandise export, garments,             declined 6.9 percent.

The non-performing loan ratio among commercial banks improved to 13.9 percent at end-April from 14.2 percent at end-March. Nevertheless, the level of bad loans rose 2.4 percent to P253.9 billion in March from P247.9 billion in the same month a year ago. Total loan portfolio among commercial banks, on the other hand,             shrank 8.1 percent to P1.6 trillion from P1.8 trillion. Meanwhile, non-performing             assets of commercial banks, which includes real and other properties owned and             acquired, decreased 2.0 percent to P439.3 billion from P448.1 billion.