Economy to grow 6% annually in ten years

The Philippines, one of the worst- performing economies in Asia over the past three decades, is finally expected to perform strongly over the next decade, with an annual growth of close to 6 percent, an Asian Development Bank said.

“While China stands out as the country with the highest growth rate, the Philippines’ growth is conspicuously slow… It has the least commonality with the other economies in the region,” the study said.

After growing by only 2.02 percent per annum in 1981-1990, 3.76 percent in 1991-2000, and 4.81 percent in 2001-2007, a study conducted by ADB chief economist Jong-Wha Lee predicted an annual growth of 5.96 percent in 2011-2020 and 5.53 percent in 2021-2030 for the Philippines.

The 38-page study noted that developing Asia expanded rapidly over the past three decades mainly due to robust growth in capital accumulation, except for the Philippines and Pakistan.

“Countries that might have grown below their potential growth rates over the past decades would tend to expand more rapidly than their historical performance. Pakistan and the Philippines belong to this group,” it said.

It noted that developing Asian economies had grown impressively over a period of nearly 30 years. The region’s real GDP in purchasing power parity terms climbed from about $3.3 trillion in 1980 to an estimated $24.5 trillion in 2009. That is an increase of 7.5 times, compared with just three times for the world economy during the same period,” it said.

It said while per capita GDP in developing Asia remains below the global average, it is rapidly catching up with advance economies. “In 1980, the income of the average Asian was just over a quarter of the world average by 2009, it had risen to nearly two- thirds,” it said.

The report noted the upward trajectory of economic growth over the past three decades in China, Vietnam and the Philippines.

It said GDP per labor in the Philippines contracted 1.0 percent during 1981-1990, followed by a small 1.1-percent increase in 1991-2000, and a 2.6-percent rise in 2001-2007.

It said GDP growth in the 1980s in the Philippines was largely explained by growth in labor and capital. Education also contributed positively, but its share was relatively small. –Roderick T. dela Cruz, Manila Standard Today