How the Philippine Gov. Measure Its Gdp and Gnp

Topics: Gross domestic product, Economics, Measures of national income and output Pages: 6 (1478 words) Published: July 24, 2008
GDP and GNP as economic indicators

Gross Domestic Product (GDP) and Gross National Product (GNP) are key figures in accessing the status of a country’s economy. These numbers are also used to gauge the competency of the administration in steering the economic wheels of the country.

By definition:

Gross Domestic Product (GDP) is the total market value of a country’s output. It is the market value of all final goods and services produced within a given period of time by factors of production within a country.

Gross National Product (GNP) is the total market value of all final goods and services produced within a given period by factors of production owned by a country’s citizens, regardless of where the output is produced.


The gross national product (GNP) is defined as the total value of income earned by residents of a country regardless of where the income came from. GDP, on the other hand, is the total value of production realized by resident producers in an economic territory. In its simplest terms, GDP is the value of goods and services made in the Philippines while GNP is the value of goods and services made by Filipinos.

Vital to understanding these economic concepts is to look at the scope by which economic territory and residency are defined. For instance, the GDP measures output of economic activities within the economic territory of a country. There are areas inside the geographic jurisdiction of the country that are not part of the economic territory such as foreign embassies and offices like the Asian Development Bank (ADB) and the United Nations. At the same time, there are areas outside the country’s geographic territory that are part of its economic territory like the Philippine embassies located abroad. The GNP, on the other hand, measures the total income of Filipino residents from all locations. The concept of residency is not equated to nationality. Filipinos who have migrated abroad and became residents of foreign countries are not accounted for in the measurement. At the same time, foreigners living in the country who have acquired residency are included in accounting the Philippine GNP. One common mistake committed is attributing the high GDP growth to the large increase in overseas Filipino workers (OFW) remittances. These remittances are not part of the GDP but are accounted for in the GNP. The National Statistical Coordination Board (NSCB) is the agency responsible for compiling and monitoring the economic statistics packaged under the National Income Accounts publication using international standards.

Measuring GDP and GND in the Philippines

There are three ways of calculating for GDP namely the Expenditure approach, the Production/Value-added approach, and the Income approach.

The Philippines however employs only two ways: the Production/Value-added approach and the Expenditure Approach

The Production/Value-added Approach

The production approach calculates the GDP based on industrial origin wherein the domestic economy is divided into three productive sectors: a) agriculture, fishery, and forestry; b) industry; and c) services. This approach sums up the value added contribution of each sector to obtain the total contribution to the economy. Data on the value added of these sectors may be obtained from producer surveys like agricultural surveys, crop and livestock statistics, manufacturing surveys, surveys of the trade sector, and others.

Table 1

The industries:
Table 1.1


Table 1.3

Expenditure Approach

The Expenditure approach, meanwhile, sums up personal consumption expenditures of households, government consumption, investment or capital formation, and exports less imports. This approach yields GDP by type of expenditure. Common sources of these data are household expenditures surveys, retail and wholesale trade surveys, producer surveys, customs records, government accounts, and special surveys done by the...
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