Prophet of boom says RP won’t enter recession

The economy will not go into recession and is expected to grow 2.5 to 4 percent this year, according to economist Bernardo Villegas.

At the sidelines of the 40th National Marketing Conference organized by the Philippine Marketing Association, Villegas said the Philippines will be among the few countries in the world that will post positive growth despite the global financial crisis.

He said the country thus should not be bothered about the measly 0.4-percent gross domestic product (GDP) registered in the first quarter, as it is not indicative of what will be the overall growth for 2009.

Villegas said economic growth will accelerate in the succeeding quarters to a high of six percent in the fourth quarter, from 3 percent in the second quarter and around 4 to 5 percent in the second quarter.

He said this year’s overall growth will be driven by overseas Filipino workers’ (OFWs) remittances, government infrastructure spending, agriculture, domestic tourism and expenditures of political candidates who will be running for the May 2010 elections.

Villegas expects OFW remittances, which comprise around 12 percent of GDP, to increase to at least $8 billion in 2009 from last year’s $6.4 billion.

The projection could go higher as the number of Filipino workers abroad will continue to rise despite the crisis, owing to their various qualities and talents, the economist added.

“Remittances from overseas Filipino workers will not decline,” he asserted.

Villegas, also a professor of University of Asia and the Pacific (UAP), further said agriculture will still be the “brightest sector” in the next 10 years.

He said domestic tourism also would be a growth driver this year, as local travelers would be encouraged to travel around the country rather than going abroad as a result of A(H1N1) virus scare.

Moreover, Villegas said a lot of infrastructure spending will take place toward the end of the year which is crucial to pump-priming the economy.

“Third quarter is when a lot of infrastructure spending will already happen; it will start in September,” he said, adding “Pump-priming is the name of the game.” –Daily Tribune