The Philippine economy to remain strong over the next 2 years

Government economic planners have remained optimistic the Philippine economy will remain strong in the next two years, as the country is determined to maintain its sound macroeconomic fundamentals and continue improving its investment climate through policy and regulatory reforms and infrastructure development.

“For this year, we expect the economy to grow six to seven percent. For next year, the growth is expected to accelerate to 6.5 to 7.5 percent,” Socioeconomic Planning Secretary Arsenio Balisacan said.

Amid some possible external risks, he said, the government is confident to meet these economic growth outlooks.

“Notwithstanding the positive economic outlook in the near-term, the government remains vigilant of the global and domestic risks to growth,” he said in the same forum.

Global risks to growth, he said, include the uncertainty in the Euro zone and the fiscal problem in the US, which can adversely affect the global economy.

“We are also mindful of the possibility of oil price increases due to a higher global demand for petroleum products,” said Balisacan, also director general of the National Economic and Development Authority (Neda).

But given the fiscal space and business confidence the past year, Balisacan said 2013 opens opportunities to sustain the growth momentum and achieve inclusive growth.

“As we have underscored in the Philippine Development Forum, these two objectives need not contradict each other. Inclusive growth is not only a goal but a growth strategy. To sustain the growth of our economy, we must ensure that economic growth benefits everyone, regardless of location or social status,” he said.

In 2012, the Philippines posted a 6.6 percent growth in real Gross Domestic Product (GDP), higher than that of Thailand (6.4 percent), Indonesia (6.2 percent), Vietnam (5.0 percent), and Singapore (1.2 percent).

For this year, economic growth target is expected to be driven by agriculture, industry and services sectors.

“Agriculture will be buoyed by the government’s conscious efforts in pursuing programs and projects that will increase the efficiency of producing staples and high-value commodities and crops,” Balisacan said.

He said the positive agriculture outlook benefits from improvements in infrastructure, logistics, and the reduction in price volatilities.

Balisacan said the industry is also set to expand faster in 2013 and beyond, mainly driven by manufacturing and construction.

“Construction is expected to grow robustly due to strategic public and private infrastructure projects. Likewise, manufacturing is expected to be more vibrant, particularly semiconductor and electronics, food manufacturing, and light manufacturing industries,” he said.

The services sector is also expected to remain robust due to the upsurge in the number of domestic and local tourists, domestic trade, real estate, renting and business and BPOs.

“We need to create new drivers of growth which have the potential of creating high quality jobs, particularly manufacturing, BPO, tourism and agribusiness,” he said.

“Our initial estimates suggest that US$3 billion in investments in these sectors will create 621,000 jobs, both directly and indirectly through multiplier effects. This represents an average investment of roughly about P200,000 per worker. The amount needed to create jobs would be much less in rural areas, particularly in agriculture,” he added.

(Story courtesy of Nelson C. Bagaforo of SunStar)