The government’s own statistics office confirmed what the Palace has been trying to dispute which was election spending as the main driver of the relatively high 7.3 percent growth in the first quarter.
Palace officials made light of the link between the massive campaign and government spending prior to the May 10 elections which economists and presumptive president-elect Benigno “Noynoy” Aquino subscribed to in saying the first quarter growth is not sustainable.
Yesterday, National Statistic Coordination Board (NSCB) director Raymundo Talento admitted to Palace reporters that the recent election spending is considered as one of the drivers of the first quarter economic growth.
At a press briefing in Malacañang, Talento said .04 percent of the 7.3 percent economic growth came from election spending alone but clarified that it is not the sole reason for the boost in the economy.
Talento, however, initially had some uncomfortable moments in explaining the impact of election spending on the growth rate, saying at first campaign expenditures owned almost half of the 7.3 percent gross domestic product (GDP) growth accounting for three percentage points inclusive of the personnel services, trade and personnel consumption, and other government spending which apparently gave credence to Aquino’s claim that President Arroyo cannot be credited for the strong growth.
But the NSCB director retracted it moments later, admitting that it was just an honest mistake on his part to incorporate the expenditures that were drawn from the manufacturing division which posted a 20 percent growth in the industrial sector.
“Let me stand corrected, based on the National Economic and Development Authority (Neda)’s estimate it’s actually .04 percent of the 7.3 percent. Basically, the election spending has a lot to do about providing stimulus to the other sectors of the economy,” Talento told reporters when sought for clarification.
“That (3 percent) is across both the expenditure and the production side… I made a wrong statement earlier because I tried to mix both the expenditure and the production side of the accounts. But, basically, in terms of GDP, it’s only .04 percentage points of 7.3,” he explained further.
Talento said the campaign spending was just one among other determining factors that boosted the country’s economy during the first quarter.
The Palace had dismissed the analysis that campaign spending was a major factor for the strong quarter growth, insisting, instead, that Arroyo’s policies were making its effect on the economy.
Deputy presidential spokesman Gary Olivar, for his part, said state economists and agencies of the government are yet to present detailed analyses of how the campaign spending actually figures in the latest first quarter growth.
“If people can present us with a list of types of spending that are part of campaign spending then we can certainly go the exercise if we can crack them down based on the submitted data, trying to extrapolate their relative share of contribution to the year on year quarter growth last quarter,” he explained.
Both Olivar and Talento further expressed optimism that this growth posted during the first quarter will be sustained given the fact that April, which would start the second quarter, is still part of the campaign period and they both claimed that it is possible to strike double digits given the encouraging global economic trend.
“It’s really Neda’s job to do the forecast. I would think that the pace of the global recovery will be a major determinant there and right now the global recovery seems to be moving and perhaps accelerating although there are some bumps on the road like the debt crisis in some European countries but hopefully the trends would continue to be upbeat and upward,” Olivar said.
“Election spending provided stimulus to the economic activity,” Talento said.
Talento said election spending significantly contributed to the manufacturing, transportation and communication and trade sectors which posted growth during the first quarter.
Latest NSCB data show that the manufacturing sector “rebounded astoundingly, supported by hefty contributions from trade and private services, particularly recreational and business services.”
The country’s GDP boomed with a growth of 7.3 percent in the first quarter of 2010 from 0.5 percent last year.
Talento said election spending could also boost second quarter economic growth. “It’s not in our mandate to make projections but the way we see it, it might be,” he said.
Olivar said the good economic performance may continue in the succeeding months, as he noted that the country’s economic growth is a legacy that Arroyo would leave to the next administration. –Aytch S. de la Cruz, DAily Tribune
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