THE Philippines is “on track” in achieving an ambitious growth target for 2012 “in light of the very good news in the economic front,” Secretary Gregory Domingo of the Department of Trade and Industry (DTI) said on Thursday.
“As we mentioned in early January, this year will be a very good year for us and the DTI is at a very optimistic range among everybody in terms of our projected GDP [gross domestic product] growth of over 7 percent this year,” he added.
GDP is the total value of goods and services produced in a country in a year.
Domingo said export numbers for the first three months of 2012 showed that “the government is on track in reaching that goal for that number.”
He added that government spending is up over that of last year, providing a boost to the economy.
The construction industry is said to be also quite hopeful of experiencing a boom this year.
In spite of rising oil prices and a high increase in economic activity, inflation numbers have been very benign, according to Domingo.
“The inflation numbers for the first three months of the year, pegged at 3.1 percent, are much better than last year’s numbers, this is the best situation,” he said.
And “the best condition [is] to have strong economic growth and low inflation rate. You cannot have a better condition than that in terms of attracting investors,” the trade secretary added.
Business optimism, Domingo said, is way up and local business people also are very optimistic and the stock market reflects such optimism.
According to him, the DTI’s investment-promotion agencies are “very busy” meeting with prospective investors and he expects that total investments will overshoot last year’s record of P750 billion.
Domingo said he strongly believes that foreign investments, particularly from Japanese companies who have expressed interest in doing business in the Philippines, will eventually materialize and bring growth to the economy.
On the consumer front, he added, prices of commodities have been generally stable.
Weekly monitoring of basic and prime commodities, Domingo said, also showed that prices of such goods were most stable during the first three months of 2012.
“There were very few movements either up or down,” he added.
The prices of commodities in the global market, Domingo said, are also relatively stable.
Over the past three months, “very serious inquiries” had been made by executives of big companies from Japan. The fourth in a series of business missions from Japan last month, he added, indicated strong investor interest in the Philippines.
For the first quarter of 2012, the Board of Investments (BOI) recorded an 83.36-percent drop in the value of total approved projects compared to the same period last year.
The first three months of last year were better than those of 2012 only because of Petron’s P74-billion project getting BOI approval.
The DTI said approved projects from foreign sources as recorded by the BOI went up by more than 50 percent.
The Japanese Chamber of Commerce and Industry, Domingo said, brought a high-level delegation including the chairmen of big Japanese companies, such as Toyota, Mitsubishi, Mitsui and Toshiba.
Most of those inquiring were “listed companies” from major economies.
The Japanese companies, he said, are eyeing expansion but some are looking for entirely new businesses.
For instance, Toshiba, he said, announced a big expansion plan for this year.
”Very strong interest in the Philippines is a combination of several factors. The first is the good governance of the [Aquino] administration. That is not an exaggeration. Good governance and [the] anti-corruption drive [are] attracting investments. We have seen a lot of investments going our way,” Domingo said.
Japanese investments, he added, are expected to come in, even though most of the “commitments” made to the various investment-promotion agencies of the government are not yet “done deals.”
“These are sizable investments. [These investments] will be in many billions of dollars. We are talking about 5, 10, 20 hectares for the manufacturing and heavy industries. Many of them are almost sure. Some of them are very likely. These are very serious inquiries. They are conducting [feasibility] studies and are looking for big areas [where they can] set up plants,” the trade secretary said.
According to Domingo, compared with the country’s neighbors, the Philippines is highly competitive because local labor cost remains low and the productive labor force gives the country’s competitiveness a boost.
With new power plants being constructed, there will be additional 650 megawatts available by the first quarter of 2013. As a result, Domingo said, power cost will start to improve by 2014.
Business registration, he added, has been made much easier with the launch of the Philippine Business Registry program, which cuts red tape in business registration. –Jonathan L. Mayuga / Reporter, Businessmirror
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