Philippine economy grew 7.3 percent last year

The Philippine economy grew by a robust 7.3 percent last year, its strongest performance since the Marcos administration, the National Statistical Coordination Board (NSCB) said Monday.

The economic performance in 2010 exceeded the government’s gross domestic product (GDP) growth target of 5-6 percent.

Election-related spending last year, global economic recovery that resulted in record growth rates of foreign trade, and renewed trust in the government contributed largely to the better-than-expected economic growth of the country, according to the NSCB.

The NSCB said the recovery of the agriculture sector and the expansion of industry and services sectors drove the Philippines to post a 7.1-percent GDP growth in the fourth quarter of last year.

“Quarter-on-quarter, the industry sector accelerated to 8.3 percent from 3.8 percent. The services sector grew to 6.9 percent from 3.1 percent. The agriculture sector — after being battered for four consecutive quarters by abnormal weather conditions — rebounded by 5.4 percent from a decline of 2.9 percent,” said NSCB secretary-general Romulo Virola.

Last year, the country posted economic growth of 7.3 percent in the first quarter, 7.9 percent in second quarter, and 6.5 percent in the third quarter.

Growth drivers

The industry sector strengthened on the back of brisk manufacturing of electrical machinery, petroleum and coal products, and food, according to National Economic and Development Authority director-general Cayetano Paderanga.

“This is consistent with the strong pick-up in domestic demand and the rebound in external trade,” he said.

Paderanga pointed out that the services sector remained firm due to strong performance of trade and private services.

“This was complemented by flourishing domestic investment, strong growth of business process outsourcing, hotels and restaurants, wholesale and retail trade, and import and export trade,” he explained.

The agriculture sector’s growth performance can be attributed not only to the harvest season but also to fewer typhoons, according to Paderanga.

This sector was also “subdued due to the lingering effects of the El Nino weather phenomenon,” Paderanga added.

Sustained strong performance

“We are happy to note that the 2010 economic performance bolsters confidence that the economy is on a path of strong recovery,” Paderanga said.

He pointed out that domestic demand continued to be an important growth engine for the Philippine economy last year.

“While personal consumption expenditures remained as the primary growth driver, we also saw investments providing a strong support to growth,” Paderanga said.

Private sector investment in construction and equipment resulted in a robust growth in gross domestic capital formation, he elaborated. “This supported the healthy pace of growth in manufacturing and services.”

Over the next six years, the Aquino administration is looking forward to a sustained strong economic performance.

“This will be built on strengthened partnerships with the private sector…. In order to further expand the economy’s productive capacity and provide enough opportunities for a sustainable and inclusive growth, government efforts shall be directed towards an integrated infrastructure program that will support the productive sectors and redound to substantial benefits to society,” Paderanga explained. — JE, GMANews.TV