The mix of indicators used in short-term economic forecasting indicated improved prospects for the Philippine economy in the fourth quarter of 2011, the National Statistical Coordination Board (NSCB) said in a report released Wednesday.
NSCB secretary general Romulo A. Virola said in a phone interview: “The composite LEI [leading economic indicator] improved in the fourth quarter of 2011, and remember, it also increased in the third quarter. This means that although the second quarter was quite disappointing for observers with just 3.4 percent growth [in terms of gross domestic product or GDP], the prospects for growth after the second quarter looks brighter.”
However, Virola would not comment on whether the country’s actual GDP for the third and fourth quarters would in fact be higher than the second quarter’s. The NSCB is set to release within this month its official data on the Philippines’ GDP for the July-September period.
Cid L. Terosa, a private economist with the University of Asia and the Pacific, said in a text message: “The LEI indicates that we can expect brisk economic activity in the last three months of the year. This will be fueled by consumption spending and remittances, both of which are intimately intertwined.”
“The LEI suggests expansion but not necessarily strong expansion. Deteriorating consumer sentiment, poor implementation of public infrastructure projects, falling number of building permits, sharp drop in Philippine exports, the immediate and lasting effects of the most recent typhoons are powerful signs that the second-semester growth will be in the neighborhood of 4 to 5 percent. Full-year GDP growth will be between 4 and 4.25 percent,” said Benjamin E. Diokno of the UP School of Economics.
Private investors, who drove much of the growth in early 2011, are awaiting such figures, including updates on public infrastructure spending, as guidance for future moves, financial and investment analysts said.
The NSCB said in a report posted on its website that the composite LEI moved up in the fourth quarter of 2011 to 0.168 from a revised 0.116 (originally 0.084) in the third quarter of 2011.
The revised LEI for the second quarter was 0.079 (originally 0.103) and for the first quarter, 0.070 (originally negative 0.012).
Of the 11 indicators that make up the composite LEI, seven contributed positively for the fourth quarter of 2011. These included the number of new businesses, visitor arrivals, consumer price index, hotel occupancy rate, foreign exchange rate, stock price index and electricity consumption. The combined share of positive contributors for the quarter increased to 65.5 percent from 55.6 percent in the third quarter of 2011, the NSCB said.