The Philippines’ robust economy continues to perform well, achieving a GDP growth of 6.6 percent in the third quarter of this year.

Acting secretary of socioeconomic planning Augusto Santos said the growth was based on the performance of the agriculture, industry and services sectors with domestic demand as well as government policy and program intervention acting as the catalysts.

“It is very welcome news, though this does not come as a surprise given the strong growth registered in the past two quarters,” Santos told local media.

Favorable weather and the department of agriculture’s Quick Turnaround Scheme (QTS) were able to help propel the agriculture, fishery and forestry sectors, which account for a fifth of the economy, as it grew 5.6 percent in the third quarter as opposed to a moderate 3.6 percent in the previous quarter. This year the QTS saw increased investments, particularly in irrigation facilities, expansion programs, credit facilitation and knowledge dissemination.

The industry sector achieved a 6.1-percent growth rate, a 1.2-percent year-on-year increase, mostly due to better performance by the manufacturing and construction sectors.

The services sector, which represents nearly 50 percent of total GDP, was up 7.2 percent from last year’s 5.8 percent. Trade, private services, transportation, communication and storage were among the main contributors to the expansion. However, the success and rapid rise of the business-process outsourcing industry was the driving force behind the service sector’s growth.

Commenting on the third-quarter performance, economist Solita C. Monsod told local media that substantial growth in investment or capital formation during the period was a strong signal expansion is becoming investment-led, which is “more sustainable” than growth based on consumption.

For the three-month period from July to September, capital investment grew by 8.9 percent, higher than the 2.1-percent increase recorded last year.

A general improvement in household incomes, better labor-market conditions and a low inflation rate helped increase consumer spending by 5.6 percent during the period, and government consumption rose by 8.3 percent as the administration continues to implement new projects, particularly in infrastructure.

The results put the country well on track to surpassing the government’s prediction for annual GDP growth of between 6.1 percent and 6.7 percent. The previous two quarters saw growth of 7.1 percent at the beginning of the year and a 20-year high of 7.5 percent in the second period.

“With growth generally spilling over into the next quarter as domestic demand strengthens, the Philippine economy should be able to surpass the projected target,” Santos told reporters.

He added, “We can easily reach 7 percent for the full year. Barring any sudden changes in the external environment, the economy is set for further strong growth in the fourth quarter.”

While analysts and economists remain optimistic the Philippines can achieve GDP growth of 7 percent for the full year, there is some concern that rising oil prices, weak exports and political uncertainty may put that figure in jeopardy.

“Inflationary pressures arising from the volatility of the oil market must be vigilantly monitored as this may be carried forward and pose downward pressure on future growth prospects,” said Santos.

The export market is an area of great concern. With the appreciation of the peso, exports rose only 4.85 percent in the first nine months. The Philippine Export Association has already revised its original export-growth forecast down from 10 percent to between 4.4 percent and 5.5 percent. As the US economy continues to weaken, these latest figures are not expected to improve.

The impact of political uncertainty and its effect on the overall economy are more difficult to predict. On the heels of another bid to overthrow the Arroyo administration, which took place on November 29 as rebel soldiers led by Sen. Antonio Trillanes IV occupied a Makati City hotel in an attempt rally support, it does not bode well for the image of the country and for attracting foreign investment.

That said, this is certainly not the first time such an incident has occurred, and private sector leaders, while disappointed, are not too concerned.

Sammie Lin, president of the Philippine Chamber of Commerce and Industry, told local media the occupation of the hotel was “unfortunate” as it comes at a time when the economy is starting to pick up. However, “Compared with previous incidents, this is not that big. The business community is not that worried,” he said.

INVESTOR BRIEFING

WATER is still flooding the basement of a shopping mall in the Philippines’ central business district after an explosion in October. At least nine died and more than a dozen businesses were kicked out from their glass-walled shops now wrapped with white-painted boards.

REDUCING POWER COSTS

The government of the Philippines plans to use state funds to address high power rates. Acknowledging it must do something about the rising cost of energy, the government announced that it intends to use more of the state’s gas royalties, National Power Corp. (Napocor) profits and Wholesale Electricity Spot Market (WESM) fees to reduce electricity charges.

RISING GDP

The Philippines’ robust economy continues to perform well, achieving a GDP growth of 6.6 percent in the third quarter of this year.

Brotherly love

Brother International Philippines believes competition makes business more exciting. And the company thinks there is still a space for one more player in the document-printing market in the country that can provide an alternative.

Winning: Breaking Through Bureaucracy

Q: How do you break through the bureaucracy that damages so many organizations? James Moss-Solomon, Bridgetown, Barbados                 

A: Damages? How about deadens?

PLAYING ALONG

TO many children, Elmo, the much-loved furry red monster from Sesame Street, is more than just a plaything. To children ages two to five years old, Elmo is a trusty playmate—a friend to lug around the playground; one who won’t complain when hugged, pinched or smothered with kisses. For parents, Elmo even makes a good teacher.

TOY TEST 2007

The holidays are just about here, and the toys are piling up in stores, waiting for you to make your list. Of course, even if your wish does come true, you have to hope for the best: That really great-sounding toy might be a piece of junk.

CONSUMER CONFIDENTIAL

This should be the time of year when Santa’s wholesale elves in the toy district in downtown Los Angeles are busy delivering cheap, Chinese-made playthings to consumers and retailers.

Lumads in the new world

It was a minifair compared with the grand bacchanalia that is the Kadayawan Festival that Davao City has come to be known for.

Mission: global customs service

Del Castillo: From what I have gathered, Commissioner Morales is a self-made man in this career; he supported himself through college while working at the Bureau of Customs as a utility man.

No run of the mill success

Management is a practical discipline measured by financial returns and competitive position. But it is easy to forget that success in business ultimately comes from a commitment to personal values. When you look at Metrobank today, the tendency is to focus on its results, its size and its position. It is easy to overlook the elements that shaped its character.

Winning: Private equity’s very public problems

Q: Why are so many private-equity deals blowing up? Alan Engle, Great Neck, New York                 

A: The short answer is that the world has changed (read: the US sub-prime-mortgage mess has erupted). A lot of companies that were once hell-bent on acquiring hot new properties suddenly want out of deals that are starting to look too cold for comfort.

A Queen Stumbles

HIS eyes stared upward as he started with that familiar tuneful articulation about Iloilo at the peak of its grandeur. A few minutes later, his voice turned wobbly as he recounted how the province slipped from prominence. “So we lost our label being the country’s Queen City of the South.”

Teacher’s pet

WHY am I passionate about Vietnam? Because Vietnam has proven to the world that it is possible to simultaneously achieve robust and sustained economic growth with equitable income distribution. 

Putting imagination to work

SOON after World War II, from 1941 to 1945, the Philippines experienced a decade of unprecedented growth in the 1950s, with Manila—despite being the most devastated city during the climactic battle era—slowly regaining its vigor to once again become a center of industrial progress.

Five steps to building your personal leadership brand

You have a personal leadership brand. But do you have the right one?

A leadership brand conveys your identity and distinctiveness as a leader. If you have the wrong leadership brand for the position you have or the position you want, then your work is not having the impact it could.

What Health Consumers Want

Consumers of health care constitute a market that is as diverse as a market can be, yet the idea that companies might profit by segmenting customers to address their varied needs seems almost foreign to the health industry, despite the billions of dollars at stake.

How Bayan got its voice back

Bayan Telecommunications’ Tunde Fafunwa is very enthusiastic nowadays because the Lopez-controlled company has risen from its low point. And the source of his excitement is largely due to the recent introduction of Span, Bayan’s wireless landline service.

Winning: Managing shooting stars

Q: How far should I go to keep a star performer who has an offer to work at a competitor? Hymie Betesh, New York                 

A: Not as far as you’re probably considering, we imagine, given the panic that strikes most managers when a star threatens to shoot out the door.

Lighting the way

Dutch electronics and lighting giant Philips Electronics has been continuously doing business in the Philippines for the past 50 years.

In the name of the people

THIS time around, former Navy officer and neophyte Sen. Antonio Trillanes IV left no room for ambiguity.

In his 2003 debut at the Oakwood mutiny, then-Lt. Senior Grade Trillanes hemmed and hawed about his intentions.

Water Is Life

FOR corporate do-gooders, corporate social responsibility (CSR) is just the start. The new trend among large and well-established corporate organizations is to integrate sustainable-development programs—not just mere philanthropic activities—to their core businesses.

Give your team a challenge they can’t resist

It’s not easy pulling a group of diverse individuals together to work as a team. Barriers abound in the form of fierce territoriality, incentive systems that reward individual rather than collective achievement, and mistrust spawned by an acquisition, merger or major internal restructuring.

Improve your return on returns

Competitive pressures have forced many retailers and manufacturers to liberalize their returns policies in recent years and gladly accept for a refund just about anything customers regret having bought.

A staged solution to the catch-22

Companies launching two-sided platforms—businesses that connect two groups of users, as credit-card companies do—have often subsidized one group to get it to use the platform. This is a risky approach, because it requires a big upfront investment.

Ship shape

For an employee, a company-sponsored overseas trip could mean mostly fun, with, of course, some work in between. For a chief executive of a company, however, it would be the opposite, and most of the time the fun part takes place in between working or not at all.

Winning: Stay the course…especially if it’s a new one

Q: Sometimes companies need to change even when there is not a crisis forcing the issue. In such cases, how do you keep your people excited about a change initiative after its newness has worn off? Trevor Smith, Singapore

A: You have to stay excited yourself. And not just excited, but obsessed.

If I had a hammer

HASHIM squinted before pulling the trigger. Although the 19-year-old is used to holding Soviet-made AK-47 assault rifles in the deep jungles of Mindanao three years back, this particularly weapon was new to him.

Big failure, little dreams

CASTELLANA, Negros Occidental—It is already past noon and yet Edelyn Pineda is still lazing around Sitio Odiong here along with her little friends.

The Morning Meeting: Best-practice communication for executive teams

Does your company’s executive team struggle with chronic communication problems and a lack of shared accountability? Many times when my colleagues and I are called in to help out an organization, we find that these two core issues underlie their problems.

Lessons from the leaders of retail loss prevention

Preventing theft, damage and errors such as food spoilage has long been an unyielding and poorly understood problem for retailers. But a few companies stand out in their ability to limit losses, and if every retailer were as successful as they are, the sector could save billions of dollars annually—as much as $27 billion in the United States alone.

The Jock Correlation in business

WITH many sports headlines today trumpeting organizational and solvency issues with various teams and sports associations across the world, there is often an almost missionary zeal to bring to sports a more “business approach.”

Winning: Developing a successful succession plan

Q: What companies would you hold up as examples of succession planning done right? Robert Handfield, Raleigh, North Carolina 

A: It’s sad to say, but your question would be a heck of a lot easier to answer if you had asked for examples of succession planning done wrong. That trend is gaining such ground these days it’s alarming.