NEDA sees ‘better’ economic expansion in first quarter

PHILIPPINE economic growth likely picked up in the first quarter of the year despite the El Niño phenomenon and an electricity shortfall, the National Economic and Development Authority (NEDA) said.

Acting Socioeconomic Planning Secretary and NEDA Director General Augusto Santos told reporters that the gross domestic product (GDP) growth may have been “better” in the first quarter than in the fourth quarter of last year.

In the fourth quarter of 2009, GDP grew by 1.8 percent.

An indicator of economic performance, GDP is the amount of final goods and services produced in a country.

Year-on-year, Santos said GDP should be “much better.”

In the first quarter last year, the economy inched up by 0.4 percent.

”[The year] 2009 was a bad year,” Santos said. In 2009, it grew by only 0.9 percent, or at the lower end of the official target range of 0.8 percent to 1.8 percent, making it the weakest since 1998.

Santos said the effects of El Niño on agriculture output and the power shortage would be offset by strong overseas Filipino workers (OFWs) remittances and the rebound of exports.

The government earlier reported that the damage to agriculture caused by the El Niño phenomenon amounted to P8 billion as of this month.

Victor Abola, economist at the University of Asia and the Pacific said the economy may have grown between 3.5 percent and 4.5 percent in the first quarter.

Abola attributed the growth to the election-related spending, government infrastructure spending and OFW remittances.

For the full year, GDP would likely grow 4.2 percent this year from an earlier projection of 3.8 percent, the economist said.

Santos said government is optimistic that the economy this year will improve as part of a global rebound.

“There is a global economic rebound this year and there are good signs coming. Exports are rebounding although we have El Niño. Also, inflation is moderate,” he said.

He said the government is maintaining its macroeconomic targets.

The government expects the economy to grow between 2.6 percent and 3.6 percent this year. –Darwin G. Amojelar, Manila Times