Economist sees RP growing by 4.1%

The economy is likely to grow by 4.1 percent this year or within the government’s gross domestic product (GDP) growth forecast for the year of 3.7 percent to 4.7 percent, an economist from the University of Asia and the Pacific (UA&P) said yesterday.

Victor Abola said that while growth is likely to slow down in the first quarter of the year, the business process outsourcing is expected to push growth.

“While we do expect a further slowdown to sub-four percent in the first quarter of 2009, I still think domestic demand – spurred by high double-digit spending, residential construction, business process outsourcing, and non-metallic mineral products should again be able push GDP growth to our forecast of 4.1 percent for the year,” Abola said in his report.

He said that the 4.5 percent GDP growth in the fourth quarter of 2008 and the 4.6 percent full-year growth last year surprised analysts as many expected the economy to take a beating because of the global financial turmoil.

The 4.6 percent GDP growth was the slowest growth recorded in seven years, a drastic decline from the 31-year high 7.2 percent GDP growth recorded in 2007.

Abola said the performances of the construction sector (13.1 percent) and the business process outsourcing industry (15.3 percent) offset the decline in the manufacturing sector.

For 2009, Abola said the economy would continue to benefit from dollar remittances from overseas Filipino workers (OFWs).

The UA&P economist said dollar remittances would help push personal consumption as the beneficiaries of Filipinos abroad have more funds to spend.

He also said that the government’s plan to accelerate infrastructure projections would also help push economic growth.

“We don’t expect such a large decline for 2009, considering the acceleration of infrastructure projects and the continued strength in the residential property segment, where OFW peso-equivalent remittances are playing a positive role,” said Abola.

Socioeconomic Planning Secretary Ralph Recto, for his part, has said that the government would boost spending to pump-prime the economy and cushion the country from the negative impact of the global financial meltdown.–Iris C. Gonzales, Philippine Star