Gov’t keeping dream 2011 goal of 8% growth

The government is sticking to a seven to eight percent economic growth target this year despite independent projections and the government’s own estimate in drafting the budget that the gross domestic product (GDP) expansion will not exceed five percent for the year.

Socio-economic Planning Secretary Cayetano Paderanga said before a Foreign Correspondents Associations of the Philippines (Focap) forum yesterday growth for the entire 2010 would likely surpass the target of between five and six percent and gross national product (GNP) expansion that includes remittances from Filipinos working overseas of between seven and eight percent.

Paderanga said the economy steadfastly expanded by 7.5 percent in the first three quarters of last year despite the decline in agricultural output as a result of the El Niño weather disturbance.

Industry and services grew, which were boosted by both strong foreign and domestic demand, he said.

With the absence of election spending and the still quite fragile global economic recovery this year, we expect growth to be more modest, he said.

He noted that in preparation of the 2011 government budget, the government assumed a conservative five percent GDP growth.

“That is only for the budget process. However, with the right policies and continued confidence, we are hopeful that the government interagency Development Budget Coordination Committee’s real GDP growth target of seven to eight percent and a real GNP growth target of nine to 10 percent would still be achievable,” he added.

He said the agriculture sector may recover this year as the impact of the government’s modernization plan kicks off.

“In the industry sector, all sub-sectors — which includes mining, construction, housing, biofuels, and the Halal food market — will post full recovery. Meanwhile, services will continually improve driven by trade, private services, and finance,” he added.

Paderanga also expected private consumption to remain a key driver on growth as remittances will still play a key role for increased spending.

“Investments will continue to post strong expansion on account of construction, agro-industry, business process outsourcing or BPO, electronics and semiconductors, and tourism,” he added.

Paderanga said the government is also drafting the Medium-Term Philippine Development Plan for 2011-2016 which will be geared toward achieving national development, having inclusive growth or growth that is shared by all, creating more jobs to empower the people and providing them with opportunities to rise above poverty.

“The MTPDP will flesh out the needed programs and policies to fulfill the visions of President Aquino’s social contract that is also consistent with the targets of the Millennium Development Goals. The plan includes priorities on supporting a higher investment rate, which is benefitting from increasing disposable income due to remittances, to be larger than the savings rate,” he said.

Public-private partnerships or PPPs are a key strategy for higher investments that will also address the lack of infrastructure, he added.  –Ayen Infante, Daily Tribune