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Philippine Business Magazine: Volume 9
No. 1 - News & Updates
2001 Economic Growth
Better Than Expected
The economy performed better in 2001 than The government
and private sector expected. GDP grew 3.4% in 2001 from 4.0% a year
ago. Government planners bet on a GDP growth rate of at least 3.3%
while analysts expected, on the average, a 3.0% expansion. According
to the National Economic and Development Authority, Philippine GDP
growth outpaced the performance of other Asian economies, but was
behind China, India, and Indonesia.
On the other hand, GNP growth rate slackened to 3.7% in 2001 from
4.5% in 2000, as a result of the slowdown in net inflows of incomes
from abroad to 9.2% from 12.7%.
The services sector still grew the fastest among the producing sectors,
although its 2001 growth of 4.3% was lower than 2000’s 4.4%.
Banks have been saddled with souring loans. Travel and tourism fell
prey to peace and order concerns. The robust performance of services
can be traced to the accelerated growth of liberalized economic
sectors. The combined retail and wholesale trade picked up to 5.6%
from 5.2%. The telecommunications industry likewise soared by 20.5%
from 20.2%.
Good weather, the use of certified seeds, irrigation, and modern
fishing equipment enabled the agricultural sector to grow by 3.9%
in 2001 from 3.3% in 2000. Agriculture’s share to GDP during
the year, however, declined to 15.2% from 15.9%. Palay, poultry,
and fishery production contributed 70% to overall sectoral growth.
Weak global demand for electronics and fallout from the 11 September
terrorist attacks on the United States dragged industrial growth
down to 1.9% from 3.9%. Manufacturing output growth decelerated
to 2.2% from 5.6%. Public works enabled the construction industry
to turn around to a 0.7% expansion from a slump of 5.0% in 2000.
Per capita GDP at current prices declined to US$891.96 in 2001 from
US$952.81 in 2000. Contributing 70.3% of GDP, personal consumption
spending expanded by a slower rate of 3.4% from 3.5%.
As exports dove from the slump in the US and Japanese economies,
the domestic economy emerged stronger, backed by a resurgence in
government spending and public investments. In the face of a global
slowdown, the economy even managed to generate 1.7 million new jobs
- 669 thousand in agriculture, 257 thousand in industry, and 784
thousand in services.
AFTA Update
Making Progress
he American Chamber of Commerce of the Philippines
took note of the progress the Association of Southeast Asian Nations
(ASEAN) has been making in its commitment for a freer trade within
the region.
In an official statement dated January 2002, the Chamber commended
the group’s efforts at making the ASEAN Free Trade Area a reality.
Amcham particularly cited that the Philippines has played a leading
role throughout the emergence of AFTA.
At the Sixth ASEAN Summit in December 1998, the ASEAN Leaders mandated
that, for the six original members of ASEAN — Brunei Darussalam,
Indonesia, Malaysia, Philippines, Singapore, and Thailand —
at least 85% of the products in their Inclusion List should have
their tariffs reduced to 0-5% by the year 2000. This proportion
would then be expanded to at least 90% of products by the year 2001,
and to all products by the year 2002, with flexibility. According
to the ASEAN Secretariat, as of 2001, 85% of all products in the
Inclusion List (numbering more than 38,400 tariff lines) of the
first six members of ASEAN have fallen to 0-5%.
Amcham says that regional economies will benefit from greater intra-regional
trade, in part by reducing dependency on major export markets in
the highly-developed Asian and Western economies while regional
consumers will benefit from greater choice and lower prices.
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