THE Philippine economy will continue to do better than the Asia-Pacific average although it will likely slow to 6.2 percent in 2013 due to external factors, according to the United Nations Economic and Social Commission for Asia and the Pacific (Escap).
In its “Economic and Social Survey of Asia and the Pacific 2013” that was launched on Thursday, Escap said strong private consumption will drive the projected 6.2-percent economic growth of the country this year.
“Poor global demand, including a slowdown in major trading partners such as China, could impede economic expansion, however,” it added.
The Philippine economy, as measured by the gross domestic product (GDP), grew by 6.6 percent in 2012.
For this year, Escap said speedy growth could materialize if progress on the Public-Private Partnership Program of the Aquino administration gained more momentum, “helped by the upgrade of the country’s rating to investment-grade status in March.”
The agency also cited the government’s plan to increase infrastructure spending to 5 percent of GDP by 2016 from 2 percent in 2012.
The World Bank and the government’s Development Budget Coordination Committee also estimated a 6.2-percent economic expansion for the year.
Escap noted that the country stepped up its public expenditure to sustain domestic demand dynamism, with the increased spending primarily concentrated on infrastructure projects.
Initiatives on private-public partnerships, which had made slow progress, have benefited from increased investor confidence, it said.
“More active fiscal policy has resulted in a manageable increase in budget deficit, from 2.2 percent of GDP in 2011 to 2.6 percent of GDP in 2012. To finance the development expenditures, the government is focusing on widening the tax base and efficient expenditure management,” Escap added.
On the social side, it said the share of the population covered by the government-owned health insurer increased from 62 percent in 2010 to 85 percent in 2012.
Escap also estimated Asia-Pacific-wide growth to be at 6 percent this year. In 2012 the region’s economy grew by an average of 5.6 percent.
It said an inclusive and environment-friendly growth is key to creating new sources of economic dynamism amid the persisting global uncertainty.
Escap further estimated that uncertainty in economic policy in the euro zone and the United States since the onset of the global crisis has shaved 3 percent off regional GDP—a loss of $870 billion in output.
“The 2013 survey reminds us that this is no time for complacency, as the need for a more inclusive and sustainable pattern of economic and social development continues to be critical,” Dr. Noeleen Heyzer, United Nations undersecretary-general and executive secretary of Escap, said in her preface to the survey.
“In the light of the region’s high degree of economic insecurity, large development and infrastructure gaps and heightened environmental fragility along with extreme exposure to climate change-related risks, it is necessary to better balance the stabilization and the developmental roles of macroeconomic policies,” Heyzer added.
China, Escap said, is estimated to record a moderate increase in growth from 7.8 percent in 2012 to 8 percent, “while India is projected to recover somewhat from last year’s low of 5 percent to 6.4 percent in 2013.”
Oil- and gas-exporting North and Central Asia will continue to benefit from high global energy prices, maintaining steady growth. In South and Southwest Asia, the economies of Afghanistan, Bangladesh, Bhutan and Sri Lanka are projected to grow 6 percent or more in 2013.
Export-led economies in East Asia and Northeast Asia as well as Southeast Asia are expected to gain from “improved, although still tepid, global trade.”
“Domestic demand will be the main economy driver in Indonesia, giving it a robust growth of 6.6 percent in 2013. Strong private consumption will support growth in the Philippines [6.2 percent in 2013] and Thailand [5.3 percent in 2013] while Vietnam’s economy is expected to pick up in the second half of 2013 to 5.5 percent,” Escap said.
It pushed for higher public investment to support a package of social protection and sustainable development policies comprising a job guarantee program, a universal pension scheme, disability benefits, increased public health spending, universal school enrollment and universal access to modern sources of efficient energy. –Max V. de Leon / Reporter, Businessmirror
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