NEDA expects weaker 3rd quarter GDP

THE National Economic and Development Authority (NEDA) expects the economy to have slowed down in the third quarter of the year. Socioeconomic Planning Secretary and NEDA Director-General Cayetano Paderanga told reporters that the country’s gross domestic product (GDP) may have grown near six percent in the third quarter.

GDP is the total value of final goods and services produced in the country.

“What we [are] really expecting [in the third quarter] that some of the drivers in the first half will not be there,” Paderanga said.

The National Statistical Coordination Board (NSCB) had reported that the economy grew by 7.9 percent in the first six months of the year compared with the 0.9 percent in the same period last year.

This was the highest semestral growth since 1998 when GDP grew 9.3 percent.

The government expects the economy to grow between 5 percent and 6 percent for 2010.

The NSCB earlier reported that the economy is likely to slow down in the third quarter of the year as the country’s composite leading economic indicator (LEI) eased from the first two quarters of the year.

The NSCB said LEI recorded a negative 0.0371 in the July to September period, compared with a revised negative 0.0902 in the second quarter.

The LEI serves as a basis for short-term forecasting of macroeconomic activity as it incorporates the behavior of indicators that consistently move upward or downward before the actual expansion or contraction of the economy.

The Aquino administration is also banking on higher infrastructure investment to accelerate economic growth in the next six years.

“The reason why we would like to target a 7 percent to 8 percent [GDP] is that what we think is necessary to really make a dent on poverty and move the country forward and we now course hope that the increased interest in infrastructure investments in the Philippines will help to counter act some of the perceived softening,” Paderanga said. –DARWIN G. AMOJELAR, Manila Times