Consumption to drive growth in 2011

MANILA, Philippines – The Aquino administration expects private consumption to continue driving growth for 2011 on the back of the continued dollar inflows from overseas Filipino workers (OFWs).

Socioeconomic Planning Secretary Cayetano Paderanga Jr. said that while growth for 2011 would be modest because of the absence of election spending, it is still possible for the economy to achieve a higher economic growth target of seven percent to eight percent.

“For 2011, with the absence of election spending and the still quite fragile global economic recovery, we expect growth to be more modest,” Paderanga said.

At the same time, he also said that with the right policies or with enough intervention from the government, the economy can grow within the target.

“With the right policies and continued confidence, we are hopeful that we will achieve the government interagency Development Budget Coordination Committee’s real gross domestic product growth target of seven to eight percent and a real gross national product growth target of nine to 10 percent,” Paderanga said.

For the rest of the year and in 2011, Paderanga expects several factors to sustain growth, including the manufacturing sector, driven by a surge in the production of semiconductors, the improvement in international trade, improved consumer confidence and sustained growth in the remittances of overseas Filipinos.

“Construction will also be a driver, given the improved investor confidence and greater focus on infrastructure development. On the demand side, growth will be driven by personal consumption expenditures, which is the primary driver of the Philippine economy,” he said.

The Philippine economy grew by 6.5 percent in the third quarter of the year, below market expectations and slower than the second and first quarter growths of 8.2 percent and 7.8 percent, respectively. –Iris C. Gonzales (The Philippine Star)