Strong private consumption expected to drive growth

STRONG SPENDING during the holidays, driven partly by remittances from overseas Filipino workers (OFW), should help drive economic growth faster than officially projected, economists said yesterday.

Augusto B. Santos, deputy director-general of the National Economic and Development Authority (NEDA), said in a phone interview that both remittances and spending may be stronger than usual “due to the economic recovery.”

University of Asia and the Pacific economist Cid L. Terosa concurred, noting that “holiday spending and OFW remittances… will help the economy achieve strong fourth quarter growth… and eventually push 2010 GDP [gross domestic product expansion]…to 7%.”

GDP grew by a faster-than-expected 7.9% in the first half, prompting NEDA officials to remark that economic expansion this year could surpass the official 5%-6% projection.

Central bank data show that growth of personal consumption expenditure accelerated to 5.14% in the first half from 4.29% last year, while OFW remittances rose 7.4% to $12.18 billion in the eight months to August. — JJAC, Businessworld