Economic slowdown seen in 2011

A senior official of the National Economic and Development Authority (NEDA) said that the Philippines is likely to exceed its growth target this year, but warned of a slowdown next year because of a “quite fragile” global economic recovery.

During a year-end briefing on Thursday, Socioeconomic Planning Secretary Cayetano Paderanga told reporters that “the full year GDP [gross domestic product] growth will likely surpass the 5 percent to 6 percent target for 2010.”
GDP is the total value of final goods and services produced in a country in a year.

“But our staff, I think, is rather confident that we will be having between 6 percent [and] 7 percent [GDP growth] this year,” Paderanga said.

The economy, as measured by GDP, grew by 7.5 percent in the first three quarters, with industry and services cushioning the decline in agriculture, which was adversely affected by the El Niño weather disturbance.

“Right now, we have a 7.5-percent growth for the first three quarters. So, we’re hoping that expected softening will not be as pronounced, in the second half going into the fourth quarter . . . We hope that the momentum will [be carried] forward to the fourth quarter and into 2011,” Paderanga said.

He added that he was hopeful that the economy in the fourth quarter will grow by at least 6 percent.

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

With the right policies and continued confidence, he added, “we are hopeful that we will achieve the government inter-agency Development Budget Coordination Committee’s real GDP growth target of 7 percent to 8 percent.”

Gross national product (GNP) is projected to grow 9 percent to 10 percent.

GNP is the total value of all final goods and services produced in a country in a year, plus income earned by its citizens minus income of non-residents there.

Paderanga, however, said that he is still optimistic that the country will achieve the 7-percent to 8-percent growth target next year, because of the reforms that President Benigno Aquino 3rd is putting in place and the investments from the public-private partnership (PPP) program.

“The impact on investments, for example, will take some time to really unfold. But we still hope that we will be able to have some policy changes that will bring about continued growth in the economy in 2011,” he added.

For the rest of 2010 and in 2011, Paderanga said that growth drivers are manufacturing, trade, private services, construction, personal consumption and private investments.

He identified one big risk in 2011—continued increases in oil and consumer prices.

“With the Aquino administration focusing on improving the lives of Filipinos, we are aiming for high sustained growth. The targets that have been set will sharply reduce poverty incidence and increase per capita income,” Paderanga said. –Darwin G. Amojelar Senior Reporter, Manila times