NEDA won’t raise 2011 growth target

MANILA, Philippines – The National Economic and Development Authority (NEDA) said it is not ready to recommend to the interagency Development Budget Coordinating Committee (DBCC) upward changes in this year’s economic growth projections despite the higher-than-expected performance of the economy last year.

The government expects the economy to grow by seven percent to eight percent this year.

Last year, the economy grew by 7.3 percent, the highest growth in 34 years since the 8.8 percent expansion recorded in 1976.

Socioeconomic Planning Secretary Cayetano Paderanga Jr. said that while last year’s growth was well above the five percent to six percent projected growth for 2010, there are factors last year that are no longer present this year.

These include election-related spending and heavy government spending.

“It would be easier to attain the 2010 target than the 2011 target but we have not given up on that,” Paderanga said.

He nonetheless said the effect of the government’s reforms such as in the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) would come in “sooner rather than later.”

The strong gross domestic product (GDP) growth in 2010 was fueled also by a strong fourth quarter growth that hit 7.1 percent or higher than the revised third quarter growth of 6.3 percent.

GDP is the sum of all goods and services produced by the economy in a given period.

Seasonally adjusted GDP grew three percent last year following a contraction of 0.8 in the previous quarter while seasonally adjusted gross national product (GNP) accelerated to 2.9 percent from the 0.2 percent growth in the third quarter of 2010.

With the economy growing at 7.3 percent in 2010, per capita GDP or GDP per person rose by 5.3 percent in 2010 from a decline of 0.9 percent in 2009.

The industry sector, led by mining and quarrying and manufacturing, fueled economic growth last year, expanding by 12.1 percent from a decline of 0.9 percent the previous year.

The services sector, led by trade and transport also supported growth with an expansion of 7.1 percent from 2.8 percent the previous year.

On the other hand, the agriculture sector, dampened largely by the El Niño weather condition, contracted by 0.5 percent from a zero growth rate in 2009.

Paderanga also said that risks to growth remain such as the movement of commodity prices particularly oil and minerals and the disturbances in the global economy.

He said that over the next six years, the government is looking forward to a sustained strong economic performance. –(The Philippine Star)