The country’s leading economic indicator (LEI) for the fourth quarter inched up from the previous three-month period, indicating the Philippines was poised to stay on a robust growth path.
This was reported Tuesday by the National Statistical Coordination Board (NSCB), which said the composite LEI for the fourth quarter stood at 0.181, an improvement from the 0.046 for the previous quarter. The latest LEI was likewise a reversal of the -0.068 in the same period last year.
“The LEI continued its upward streak in the fourth quarter of 2013, signifying that the economy may be expected to sustain its upward direction during this quarter,” the NSCB said in a report.
An indicator of the economy’s growth performance for a given period, the LEI is measured by taking into account 11 key factors: (1) money supply, (2) wholesale price index, (3) merchandise imports, (4) hotel occupancy rate, (5) terms of trade index, (6) electric consumption, (7) number of new businesses, (8) stock price index, (9) exchange rate, (10) visitor arrivals and (11) consumer price index.
According to the NSCB, the first eight factors contributed positively to the increase in the LEI.
Money supply in August posted its fastest pace of growth in nearly 11 years when it expanded by 30.9 percent year on year to P6.03 trillion, the Bangko Sentral ng Pilipinas reported earlier. The increase in money supply was attributed to rising demand for credit, which, in turn, was cited as a signal of rising business activities.
The expansion of money supply was also attributed to a recent regulation by the Bangko Sentral ng Pilipinas disallowing retail funds from being invested in its special deposit account (SDA) facility.
Based on the projection of the NSCB, money supply will continue to expand significantly in the remainder of the year.
Merchandise imports recently recovered from a declining trend in the first semester amid anticipation of improving global demand for Philippine-made goods. A significant portion of the country’s imports are made up of capital goods, raw materials and intermediate inputs for the production of goods for export. An increase in imports is expected to push manufacturing output in the months ahead.
The National Statistics Office reported earlier that merchandise imports grew by 6.9 percent in August from a year ago. According to government projection, which was partly taken into account in the computation of the LEI, imports would continue its growth momentum in the fourth quarter.
The economy’s performance in the first half, when it expanded year on year by 7.6 percent, prompted officials to predict that the full-year growth rate would exceed 7 percent.