While the Philippine economy managed to register a 7.2-percent gross domestic product (GDP) growth for the whole of 2013, there are signs that an economic slowdown may be happening soon, as shown by the devaluation of the peso, and massive outflow of foreign investment portfolio in the first month of the year, among others.
Now the government-run Philippine Statistics Authority may be backing that view, as it announced on Monday that the Philippine economy may grow slower in the first quarter of the year, with the eight out of 11 leading economic indicators (LEI) posting declines for the quarter.
The LEI is the basis for quarterly economic growth that takes into account 11 major indicators, and its change of direction or slope that signals the growth trend of a country’s economy. The LEI is used to forecast future economic growth.
Based on data released by the PSA, the composite LEI for the first quarter went down by 0.037 compared to the 0.056 recorded in the first quarter last year, and 0.141 in the fourth quarter of 2013.
“LEI exhibited a downward direction in the first quarter of 2014, posting 0.037 from a revised 0.141 in the fourth quarter of 2013. This indicates that the country’s economic activity may slow down during the [first]quarter of this year,” the PSA said.
The PSA said that eight out of 11 LEI indicators went down, which constitute 72.7 percent of the total first GDP. The indicators that posted negatives were: Total merchandise imports; stock price index; money supply; visitor arrivals; foreign exchange rate; electric energy consumption; wholesale price index and hotel occupancy rate.
The other three indicators out of 11 that contributed positive growths to the LEI were number of new businesses; terms of trade index; and consumer price index.
The PSA also noted that there were seven indicators that shifted from positive to negative, which included electric energy consumption, hotel occupancy rate, total merchandise imports, money supply, stock price index and wholesale price index.
Consumer price index, on the other hand, was the only indicator that shifted from negative to positive.