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Philippine economy seen to expand 6.5 %
Publication Date : 30-01-2013
“All of us will be impressed,” President Benigno Aquino III said yesterday of the report on the full-year economic growth rate in 2012, which the government planning agency is set to release Thursday.
Still exuberant over renewed investors’ confidence in the country, the president echoed pronouncements by officials of the National Economic and Development Authority (Neda) that the growth of the economy will surpass the official target of 5-6 per cent for the past year.
Aquino, however, declined to prematurely disclose figures of the fourth quarter and full year growth in 2012.
“All of us will be impressed,” Aquino said on the sidelines of the Neda’s 40th anniversary celebration in Pasig City when asked about full-year growth prospects for 2012.
Socioeconomic Planning Secretary Arsenio Balisacan also said economic growth in 2012 was expected to exceed the target range of 5 to 6 per cent.
“The first three quarters averaged 6.5 per cent, so exceeding 6 per cent for the whole year is very easy,” Balisacan said, noting that it was “possible” the economy grew by 6.5 per cent in the fourth quarter. The fourth quarter usually benefits from Christmas spending, Balisacan said.
Combined with very little “shocks” and the minimal effect of flooding on agriculture and other sectors, the Philippines is in for a robust fourth quarter performance.
The economy grew 6.3 per cent in the first quarter of 2012, followed by 6 per cent and 7.1 per cent in the second and third quarters, respectively.
Hitting a growth rate of more than 6 per cent for the full year would be “impressive” considering the target range, the persistent uncertainty in the global community, and the challenges faced by the country’s neighbours, said Balisacan, who is also the Neda director general.
The Philippines, like most of its neighbours in Southeast Asia, has stayed resilient in the face of the European debt crisis and weak growth in key trading partners such as the United States, with strong private and public spending offsetting weaker exports.
The economy needs to become more diversified to complement consumption with exports and investment, Balisacan said.
“We have a lot of problems in infrastructure from transport to power, ports, airports. We are paying very strong attention to all these infrastructure issues. This year and next year, there’s a strong focus on infrastructure development,” he added.
Even up to mid-August of last year, there were some doubts that the economy would perform well. “People were saying we can only grow at 4 to 5 per cent. We have to have more confidence in ourselves,” Balisacan said.
The Philippines aims to chalk up an average of 7-8 per cent annual growth from 2010 to 2016 in order to curb poverty and spread income growth opportunities to the countryside as part of its thrust for “inclusive growth”.
In his speech at the Neda, the president, fresh from his attendance at the World Economic Forum in Davos, Switzerland, continued to rave about resurgent investors’ confidence in the country that he said was an offshoot of sound economic policies.
“The good news we shared with the businessmen and world leaders we met with during the recently concluded World Economic Forum are results of your efforts to align the work of agencies: From our economic growth averaging 6.5 per cent for the first three quarters of 2012, to the fact that the previous year’s average inflation rate was kept within our targets, to the developments we have made in our three priority sectors, namely, agriculture, tourism, and infrastructure,” he said.
Citing government data, Aquino said the economy was “growing” and this was proof of the “work we have put in”.
“The data also remind us of the need to ensure that this growth is sustainable and broad-based, so that we can sooner achieve our goal of inclusive growth. This is why we are continuing our efforts to level the playing field, to weed out corruption, and to step up our competitiveness in the global market,” he added.
In spontaneous remarks after his speech, the president said he held meetings with CEOs in Davos, and recounted how eager they were to expand their business in the country after decades of operation.
“There were companies that were over a hundred years in the Philippines; the youngest had logged in 66 years. Modesty aside, they were very eager to expand their business here. And then those who have no business here are scrambling to bring a delegation here to take a look at the opportunities,” he said.
Turned upside down
Relatedly, Aquino said a large business delegation called on him with a strong pitch for its products and services, years after he had met them and short of begged them to invest in the country during a visit by his mother, then President Corazon C. Aquino.
“Now, they’re asking us to patronise their products. It’s as if the world has turned upside down,” he said, drawing applause.
Facing reporters later, the president stood by the country’s economic growth following a survey by the Malaysian credit-watcher RAM Rating Services showing the Philippines as the laggard among the region’s major economies.
“I think the Neda will be answering it on our behalf. It’s a new organisation to me. (It’s the) first time I’ve heard of it. I haven’t had the occasion to look at it. But I think that even they will agree that our performance vis-à-vis their own economy is very, shall we say, very much in our favour,” he said.
Then responding to a survey by the Legatum Institute in which the Philippines ranked 67th among 144 countries in its Prosperity Index, Aquino said: “I’m sure the one conducting that is also human. Just like in the expression, beauty is in the eye of the beholder….Those data are a little obscure to me. I’m trying to compare apples to apples.”