MBC Research forecasts 6.6%–6.8% GDP growth in Q4 2007

30 January 2008 – MBC Research estimates the country's GDP growth to have picked up to between 6.6% to 6.8% in the last quarter of 2007, up from 5.5% in the last quarter of 2006.

The group projects a strong 6.0% agriculture, fishery, and forestry growth for the same quarter from 1.7% in the previous year. MBC Research likewise estimates a fourth-quarter industry growth of at least 6.1%, faster than its 3.6% growth performance in 2006 as manufacturing showed a slight improvement in terms of volume of production and capacity utilization rate. But growth in services could have tapered down to 7.2%–7.7% in the final quarter of 2007 from 8.4% in 2006.

MBC Research expects
5.6%-6.0% Q1 growth

30 May 2007 – MBC’s Research and Information Group forecasts a GDP growth rate of 5.6%–6.0% in the first quarter, compared to 5.7% a year ago. The National Economic and Development Authority has projected a 5.3%–6.1% growth for the same period, but the consensus among analysts is a growth rate of 5.6%–5.8%.

According to the Bureau of Agricultural Statistics, the agriculture and fishery subsectors expanded 3.6% in the first quarter, down from 3.9% a year ago. For the nonagricultural sectors, the National Statistical Coordination Board’s index of 11 leading economic indicators improved to 0.151 in the first quarter compared to 0.005 a year ago. The volume of production in manufacturing reported by the National Statistics Office shrunk 7.4%, slower than last year’s 8.1% decline, even as average capacity utilization dipped to 79.8% from 80.0%.

Bank lending increased 9.9% in end-March, up from 1.3% a year ago, as the nonperforming loan ratio among commercial banks improved to 5.3% from 8.0%. Tourist arrivals expanded 8.8% to 790,888 from 726,912.

For consumer prices, an appreciating exchange rate brought headline inflation rate down to 2.9% in the first three months of the year from 7.3% a year ago, despite rising fuel prices abroad. At the same time, the core inflation rate also decelerated to 3.3% from 6.2%.

The average peso-dollar rate appreciated 6.5% to P48.604/US$ from P51.884/US$ as the country’s gross international reserves continued to rise, reaching US$25.0 billion as of end-March, which could cover 4.6 months’ worth of imports of goods and services and income. Merchandise exports rose 12.0% to US$12.2 billion from US$10.8 billion, while merchandise imports grew 7.1% to US$12.0 billion from US$11.2 billion. Overseas Filipino workers’ remittances increased 24.0% to US$3.5 billion from US$2.8 billion. Net foreign portfolio investments went up 71.1% to US$838.1 million from US$489.9 million. The balance of payments surplus, however, narrowed down to US$1.4 billion from US$2.1 billion.

The interest rate bellwether, the 91-day T-bill rate weighted average, slipped to 3.149% in the first three months from 5.031%. Government spending was lower than the programmed P301.6 billion, reaching P289.3 billion from P272.6 billion a year ago. Of this amount, P89.1 billion was disbursed for interest payments, lower than the P103.8 billion disbursed a year ago and the ceiling of P96.0 billion. At the same time, government revenues reached only P237.3 billion, below the P301.6 billion target, although it came in higher than the P205.0 billion the previous year. Thus, the fiscal deficit amounted to P52.0 billion, breaching the programmed shortfall of P45.8 billion, although it came in lower than the P67.6 billion a year ago.

MBC Research projects
5.1% Q1 GDP growth

28 May 2005 – With agriculture posting below 0.6% growth in the first quarter from 8.1% a year ago, GDP growth could have slowed down to at least 5.1% in the first quarter from 6.5% a year ago. Crop production shrunk 3.1% from a growth of 5.8% a year ago on account of losses brought about by last year’s typhoons and an ongoing dry spell. Livestock production decreased 2.4% compared to 3.3% growth a year ago. Poultry production, on the other hand, rose faster to 7.5% from 3.4%. Fishery production slowed down, growing 5.9% from 20.8%.

MBC Research believes, however, that growth in the industrial and services sectors outpaced last year’s growth rates of 5.6% and 8.3%, respectively. The manufacturing sector’s output rose 1.7% in the first quarter from a decline of 3.9% last year as the average capacity utilization rate went up to 79.8% from 78.4%. In end-February, the manufacturing sector led commercial bank lending, growing by 5.8% compared to a contraction of 5.5% a year ago. The average benchmark interest rate slightly fell to 6.751% from 6.891%. Overall electricity consumption in the Meralco area dropped 0.03%, even as commercial and industrial consumption rose 2.8% and 2.1%, respectively.

Rising consumer prices, however, weakened domestic demand. On account of rising fuel pump prices, both headline and core inflation rates picked up to 8.5% and 8.0%, respectively, from 4.1% and 4.2% a year ago. Net sales volume in manufacturing continued to shrink by 6.5% from a 2.3% decline a year ago. Sales of appliances also shrunk 18.3% in the first three months. Investments approved by the Board of Investments fell 52.2% to P52.6 billion from P110.1 billion a year ago. Meanwhile, government spending increased 7.7% to P315.6 billion from P293.1 billion. While merchandise exports grew 3.5%, merchandise imports shrunk 3.6%, even as the peso-dollar rate appreciated 1.7% to P55.006/US$ from P55.966/US$.

On the labor front, the economy created 87,000 new jobs in the first quarter, but the ranks of the unemployed swelled by 276,000. Around 73,000 workers lost jobs in the industrial sector and 24,000 in the services sector. On the other hand, agriculture generated 185,000 work opportunities, reflecting the delay in the planting season late last year.

Filipinos leaving the country to work abroad grew 0.6% to 257,419 from 255,867. At the same time, remittances from overseas workers rose 3.3% to US$2.3 billion from US$2.0 billion. With income from abroad, GNP could have grown by 5.3% in the first quarter, compared to 6.5% a year ago.