PHNO-BE: RP ECONOMY GREW 6.4% BEYOND EXPECTATION IN 1st QUARTER

RP ECONOMY GREW 6.4% BEYOND EXPECTATION IN 1st
QUARTER

[PHOTO -Public construction
fueled hiked growth in the first quarter, which registered an unexpected 6.4
percent growth.INQUIRER/ MARIANNE
BERMUDEZ]
MANILA, JUNE 1, 2012 (INQUIRER) By: Riza T. Olchondra
The Philippine economy grew 6.4 percent in terms of gross domestic
product in the first quarter of 2012, driven mainly by a robust services sector
and higher domestic consumption, government officials said at a press briefing
on Thursday.
National Statistical Coordination Board secretary-general Romulo A. Virola
said that services contributed the most to GDP growth with 4.7 percentage points
(the highest since the third quarter of 2004), followed by industry with 1.6
percentage points and agriculture, fisheries, and forestry with 0.1 percentage
point.
Socioeconomic Planning Secretary Arsenio M. Balisacan said the first-quarter
growth was well above the market's consensus forecast of 4.8 percent.
"Also, the Philippines posted the highest growth among Asean and other
neighboring countries except China," said Balisacan, who is also the
director-general of the National Economic and Development Authority (NEDA).

[PHOTO -WILL THEIR LIVES CHANGE? The government is confident that as
the economy continues to grow, the benefits will improve the lives of
marginalized people like these Dumagat children in Rizal. (
Jacqueline Hernandez)]
Growth for the quarter was supported by accelerated government spending
(including for infrastructure and conditional cash-transfer spending), low
prices which supported household consumption, better-than-anticipated exports
performance, continued credit expansion, overseas remittances, tourism, and
business and consumer confidence, Balisacan said.
According to NEDA, growth in the first quarter of 2012 translated to an
increase in employment of 1.101 million, mainly in services and industry.
Tourist arrivals reached 1.15 million in the same period. Overseas Filipino
remittances increased by 5.4 percent to reach $4.84 billion in the first three
months of 2012.
Balisacan said growth in the January-March period may be sustained in the
second quarter and may even accelerate for the rest of the year.
As the first-quarter growth numbers exceeded most expectations, there comes
the inevitable question of whether the growth is sustainable or at least
translates to job creation and poverty reduction.
"The continued strong inflows of remittances, robust inbound tourist receipts
and low inflation environment contributed to significant increases in employment
creation, particularly in the services sector, which fueled consumption,"
Balisacan said.
However, Dr. Benjamin E. Diokno of the UP School of Economics said via e-mail
that the better-than-expected economic growth may not necessarily be
sustainable.
"Is the better-than-expected economic growth the result of playing around
with price deflators? For example, agriculture shrank by 3.1 percent in nominal
terms; yet it increased by 1 percent in real terms. That's silly unless food
prices fell during the period, which they didn't," he said.
Diokno also pointed out that exports growth exceeding imports growth, as
shown in government figures, is "unusual" considering the small growth of
exports. He said this may indicate that imports, especially electronic products
that make up the bulk of shipments, must really be low given the recent growth
in petroleum imports.
"Certainly, the positive net export is not sustainable and perhaps not even
consistent with strong growth in the future. The global market is shrinking and
volatile. The growth of the Philippine economy should be based on domestic
demand," Diokno said.
Diokno also noted that there was a "worrisome" trend in construction which,
he said, grew on base effect.
"Public construction in the first quarter of 2011 was horrendous. The
worrisome trend is the behavior of private construction, which started to stall
in the second half of 2011. Private construction plummeted 9.9 percent in the
first quarter of 2012 from a strong expansion of 23 percent in the first quarter
of 2011. Private construction accounts for about 3/4 of total construction. This
suggests that the government has to step up its public-private partnership
projects and the implementation of its infrastructure program," he said.
GDP growth in the first quarter of 2011 was 4.9 percent. Growth for full-year
2011 was 3.9 percent.
For full-year 2012, the "fighting target" for GDP growth is still 5 to 6
percent although there is a possibility that actual growth may exceed this
level, said Balisacan.
Higher growth would help the Philippines meet its target average annual
growth of 7 to 8 percent from 2010 to 2016.


Chief News Editor: Sol Jose Vanzi
© Copyright, 2012 by PHILIPPINE HEADLINE NEWS ONLINE
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rights reserved




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