Nat'l savings rate rises to 28% of GDP

The country’s national savings rate – or the amount of income saved – is higher last year or almost 28 percent of gross domestic product.

This is about P1.45 trillion or 27.8 percent of GDP, which is the sum of all goods and services produced, of P5.4 trillion. In the meantime the national savings rate in 2004 was 27.5 percent of GDP, roughly P1.29 trillion of P4.8 trillion.

Savings, as a portion of income, is the amount left after deducting all expenditures and payment of liabilities for a certain period. The residual money is saved and either kept in banks to earn interest or spent abroad.

According to former Finance Secretary Juanita D. Amatong, "this is very encouraging because there was a time when our savings rate were low."

Amatong, now Monetary Board member of the Bangko Sentral ng Pilipinas, delivered her "Financing Local Government Units" speech before the National Convention of the Philippine League of Local Budget Officers in Baguio.

In the 1990s and early 2000 the Philippines is considered to have the lowest savings rate in the region. The Asian Development Bank reported earlier that while there are improvements from 1990 to 1999, from P211.7 billion in 1990 to P667.2 billion a decade later, the level was still low compared to other Asian countries. By 1999, the ratio of domestic savings was 22.3 percent of GDP.

In the meantime Amatong said the investments as a portion of GDP, dropped to 15.7 percent in 2005 from 17.1 percent in 2004. She said these figures are in contrast to a 21 percent investment rate in 2001.

 

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