NEDA says economy likely grew 5% in 2Q

THE National Economic and Development Authority on Friday said the Philippines’ second-quarter economic growth may have been little changed from the first three months of this year.

In a briefing, Socioeconomic Planning Secretary and NEDA Director-General Cayetano Paderanga told reporters that the country’s gross domestic product may have expended by 5 percent in the April to June period. This is slightly higher than the 4.9 percent growth in GDP the first quarter.

GDP refers to the total value of final goods and services produced in a country.

“We hope the second quarter GDP might be better than the first quarter and it would be probably modest [compared with] last year,” Paderanga said.

Philippine GDP grew 7.9 percent in the second quarter of 2010.

The planning chief said the drivers of growth for the second quarter this year likely were the same as in the previous quarter.

“The drivers that we have in the first quarter seems to be there,” he said.

The National Statistical Coordination Board earlier said that the industry and agriculture sectors as well as household spending drove the first quarter growth.

Paderanga said the government will accelerate spending in the second half to meet the 7- to 8-percent GDP growth target this year.

“The 7-percent to 8-percent GDP is still a fighting target this year, but it would be easier to achieve in 2012,” he said. Early this week, Department of Budget and Management Secretary Florencio Abad admitted that a pickup in public spending during the second quarter was unlikely to bring the government back on track to meeting its programmed expenditures.

He said the government may end the first semester with a budget deficit that is less than half its full-year ceiling of P300 billion.

“We are definitely catching up in our public spending particularly in the capital outlay this second half to meet our P300 billion deficit program for 2011,” he had said.

Under the government’s Philippine Development Plan for 2011 to 2016, the 7 to 8 percent annual growth target will generate an average of a million jobs each year to be found primarily in the industry and services sectors.

The annual growth target implies a tripling of per capita incomes to about $5,000 in two decades.

“This is a higher growth trajectory than the past decade’s and shall be attained through a higher contribution of physical capital to GDP growth, as well as through the increase in total factor productivity through massive investment in transport, water, energy and other infrastructure and through good governance,” the economic blueprint read.

The plan requires a higher investment ratio to reach 22 percent by 2016. –Darwin G. Amojelar, Senior Reporter, Manila Times