My Common Sense Approach in Interpreting the GDP

Philippine GDP has three major sectors:

  1. Agriculture, Hunting, Forestry, and Fishing (AHFF)
  2. Industry
  3. Services

AHFF has the following subsectors:

1. AGRICULTURE, HUNTING and FORESTRY
a. AGRICULTURE
Palay
Corn
Coconut including copra
Sugarcane
Banana
Mango
Pineapple
Coffee
Cassava
Rubber
Other crops
Livestock
Poultry
Agricultural activities &  services
b. FORESTRY

2. FISHING

Industry has the following subsectors:

INDUSTRY SECTOR
a. Mining & Quarrying
b. Manufacturing
c. Construction
d. Electricity,Gas and Water Supply

Services has the following subsectors:

SERVICE SECTOR
a. Transportation, Storage and Communication
b. Trade and Repair of Motor Vehicles, Motorcycles, Personal and Household Goods
c. Financial Intermediation
d. Real Estate, Renting & Business Activity
e. Public Administration & Defense; Compulsory Social Security
f. Other Services

After learning what composes the Philippine GDP, analysis of the Philippine economy will be simple and asking the right question will be the key to derive useful insights from the data.

Below is the Philippine GDP pie chart:

IG1

The Philippine economy depends on the service sector? What supports this sector? Remittances from abroad

Below is the pie chart for AFFH Sector:

IG2

AHFF sector has the smallest share in the Philippine GDP, how can the government improve AHFF share? Investment in rice production

Below is the pie chart for Industry Sector:

IG3

The second driver for growth in the Industry sector is construction, what is the future of the construction subsector in the Philippine economy? Private-Public-Partnerships

Below is the pie chart for Services Sector:

IG4

Trade subsector is the largest contributor to the Services sector, what does this imply? Strong domestic consumption

 

What conclusion can you derive from all the data above?

The strong economic performance of the Philippines was attributable to the Country’s Service and Industry Sector. The share of the Service Sector in the GDP stands at more than 50% which means that an economic development that will cause the sector to grow can boost the Philippine economy. However, it would also mean that an unfavorable economic development that can contract the industry can drag the Philippine economy down. Diversification of GDP growth source to other sector such as the Agricultural sector is important. Also, good governance should be continued beyond the current administration to maintain or further improve the attractiveness of the Philippines for investments both local and foreign.

 

Source: http://www.nscb.gov.ph/stattables/

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3 thoughts on “My Common Sense Approach in Interpreting the GDP

  1. Pingback: Philippine Economy, Stock Thoughts: PERC | Fundamental Enthusiast

  2. Pingback: Airline industry, Rice, Stock thoughts: EDC, FGEN | Fundamental Enthusiast

  3. Pingback: Learning from Mistakes, PH to Sustain 6% growth, Stock thoughts: ACR, LTG, MEG | Fundamental Enthusiast

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