Japan’s recovery frees Philippines from recession threat

Japan’s announcement of a second-quarter growth bolsters the Philippine government’s projection that the local economy will be spared from a recession for the rest of this year.

“That’s good news. The US is expected to be out of recession and now the Japanese,” Gary Olivar, presidential economic spokesman, said Tuesday. “These are major partners [of the Philippines], and you know China is also dynamic. That’s why [former Socioeconomic Planning] Secretary [Ralph] Recto said recently that we’re not in a danger of recession anymore so this is an additional proof that we can totally escape recession.”

When asked if the Palace expects better economic environment later this year, he said: “Maybe in the third or fourth quarter. I think we are projecting growth this year of 2 [percent] to 3 percent in the low side . . .”

Out of the doldrums

Earlier Monday, Japan announced that it finally recovered from recession after posting positive growth in the second quarter. Japan followed Germany and France in posting growth after massive government spending resuscitated the ailing global economy.

Japan’s economy, the second largest in the world, grew by 0.9 percent from April to June, after contracting for four previous quarters. The country’s gross domestic product (GDP) grew at an annualized pace of 3.7 percent in the second quarter, having shrunk 3.1 percent in the first quarter and by 3.5 percent in the fourth quarter of 2008.

GDP, a key economic indicator, is the total cost of all goods and services produced in the country in a year.

Japan plunged into recession in the second quarter of 2008 after a severe global downturn crushed demand for its cars, electronics and other consumer goods.

Weak demand for its major exports appear to be over after it posted a 6.3-percent increase in exports from April to June—the first increase in five quarters.

Experts said they expected the Japanese economy to keep growing through the rest of 2009.  –Angelo S. Samonte, Reporter, Manila Times