First-Quarter Performance
Beyond Expectations
Election-related spending and robust services pushed GDP growth to a 17-year high of 6.9% in the first quarter. The country’s record was way ahead of the growth figures posted by its neighbors, except for China and Vietnam. The strong showing of the domestic economy during the period exceeded expectations, but remains on track with the government’s full-year growth target of 6.1%–6.7%.
| Strong Showing |
| First-quarter growth, in percent |
2006 |
2007 |
| GDP |
5.7 |
6.9 |
| GNP |
6.3 |
6.6 |
| By Industry |
| Agriculture |
4.1 |
4.2 |
| Industry |
5.3 |
5.3 |
| Services |
6.7 |
9.1 |
| By Expenditure |
| Private consumption |
5.3 |
5.9 |
| Government spending |
7.6 |
13.1 |
| Capital formation |
0.3 |
0.6 |
| Exports |
13 |
9.1 |
| Imports |
0.7 |
2.5 |
| Source: NSCB |
Meanwhile, GNP growth was lower at 6.6%, albeit higher than the 6.3% posted a year ago. Net factor income from abroad grew slower at 3.8% compared to 13.4% a year ago due to equity outflows of property expense that offset compensation income inflows.
The National Statistical Coordination Board reports that the seasonally adjusted GDP rose 2.5% in the first quarter. Per capita GDP grew 4.8%, the highest in nine quarters, but labor productivity dropped slightly to 3.2% from 3.3% a year ago.
Texas Instruments Expansion
For Old Times’ Sake
 |
| Texas Instruments at the Baguio City Economic Zone |
It was a toss-up between China and the Philippines. In the end, Texas Instrument’s long and fruitful history at the Baguio City Economic Zone spelled the difference in its decision to locate its newest production plant in the Philippines. The US$1-billion eight-hectare plant will be built at the Clark Special Economic Zone in Pampanga.
This big-time investment of the world’s largest manufacturer of mobile chips is being hailed by the government as one of the single-biggest investments in Philippine economic history and is seen to boost the country’s stock in its pursuit for global competitiveness. The expansion of TI’s operations is expected to enhance the country’s export earnings, of which 70% comes from semiconductor exports. Then not only will the new facility generate 3,000 new jobs once it operates at full capacity, the country will also benefit from the transfer of technology and TI’s support for community projects.
The continuous rise in the global demand for electronic products has made Texas Instruments the third-largest semiconductor company in the world. In the Philippines, TI was No. 2 in the list of the top 1000 companies in 2004 and No. 4 in 2005.
Presently, its 28-year-old facility in Baguio City is assembling and testing semiconductors for flat-screen TVs, mobile phones, digital cameras, aerospace machines, and even cars. It has similar plants in Japan, Taiwan, Malaysia, and Mexico, but its Philippine operations account for 40% of the company’s global sales.
The new semiconductor factory that will rise in Clark will have double the current capacity of the Baguio plant, which no longer has space to accommodate the expansion. Construction of an initial 77,000 square meters of factory space will begin in July or August, while production is expected to commence in the second semester of 2008. |
