It’s official: Philippine economy outpaced growth of Southeast Asian neighbors in 2012

MANILA – The Philippine economy in 2012 outpaced the growth of neighbors in Southeast Asia, the National Economic and Development Authority (NEDA) said on Monday.

In a statement, NEDA Director-General and Socioeconomic Planning Secretary Arsenio Balisacan said the country’s economic growth of 6.6 percent last year was higher than that of Thailand (6.4 percent), Indonesia (6.2 percent), Malaysia (5.6 percent) Vietnam (5 percent), and Singapore (1.2 percent).

The country also exceeded its economic growth target of between 5-6 percent for last year.

Balisacan said the growth of the country’s gross domestic product (GDP) in 2012 came mostly from the services and industry sectors, which grew 7.4 percent and 6.5 percent, respectively.

“Construction was also a main contributor due to the accelerated government spending in the first semester, and this was further driven by private construction in the second half of 2012,” he said.

On the demand side, GDP growth was driven by private consumption, net exports, and government consumption.

“While household consumption continued to dominate the demand side of the Philippine economy, worth noting is the improving shares of fixed capital investments and net exports. Fixed capital investment reflects the faster pace of the public sector’s infrastructure development spending and the private sector’s as evident spending in construction and durable equipment,” Balisacan said.

For 2013 and 2014, the economy is expected to remain “strong” despite some external risks as the country is seen to maintain its sound macroeconomic fundamentals and continue improving its investment climate through policy and regulatory reforms and infrastructure development, the NEDA chief said.

“For this year, we expect the economy to grow 6 to 7 percent. For next year, the growth is expected to accelerate to 6.5 to 7.5 percent,” he said.

Despite the positive economic outlook in the near-term, Balisacan said the government remains vigilant of the global and domestic risks to growth.

“Global risks to growth include the uncertainty in the Euro zone and the fiscal problem in the US, which can adversely affect the global economy. We are also mindful of the possibility of oil price increases due to a higher global demand for petroleum products,” he said.

On the domestic front, the agriculture sector remains highly vulnerable to typhoons and other weather disturbances, Balisacan said.

The NEDA chief also said providing decent jobs to Filipinos remain a challenge of the government.

“At the heart of the poverty problem is the inadequacy of jobs, especially decent, high-quality jobs,” Balisacan said.

“Although job creation between 2010 and 2012 has been quite significant, the level of unemployment has been quite high — 7.4 percent in 2010 and 7.0 percent in 2012,” he said.

To generate more and better quality of employment, Balisacan said the government has to simplify labor regulations to enable industries to adapt to the country’s changing economic structure.

“We will also continue to address problems of skills mismatch,” he said, adding that the government will provide the necessary environment to encourage not only the big companies but also the micro, small and medium enterprises to be partners in development through marketing assistance, access to credit and reduced red tape.

“We will also make our industries and our workforce competitive and productive by investing in R&D, technology and human resource development,” he added. –Darwin G. Amojelar, InterAksyon.com