10% GDP growth doable – BSP exec

MANILA, Philippines – Monetary authorities believe that the country’s domestic output as measured by the gross domestic product (GDP) could grow in double-digit levels if the administration of President Aquino is able to put in place much needed physical infrastructure and at the same time develop human capital to pave the way for the entry of more investments into the country.

BSP Deputy Governor Diwa Guinigundo said the Philippines could register a higher GDP growth of 10 percent if the new government manages to pursue key infrastructure projects that would help sustain the strong economic recovery in the first quarter of the year.

“A 10-percent GDP growth is doable as long as we are able to put in place the necessary infrastructure both physical and human,” Guinigundo told reporters.

He pointed out that the investments would continue to flow into the country once investors see that the necessary infrastructure are put in place and the steady supply of skilled Filipino workers are maintained.

According to him, capital inflows are necessary to jumpstart and sustain strong economic recovery.

“At this point, it does not matter if it is foreign or local but you have to have capital inflows,” Guinigundo stressed.

The BSP official said it is also important to ensure level playing field as well as lower cost of production through cheaper power rates in the Philippines to attract more investments.

President Aquino during his first State of the Nation Address (SONA) last July 26 that the government would pursue key infrastructure projects with the help of the private sector and at the same time further lower the cost of production at make it easy for investors to invest in the country.

Guinigundo said the revised GDP growth of between 5.0 percent and 6.0 percent this year was achievable paving the way for a stronger economic growth in the coming years.

The country’s GDP grew at a stronger-than-expected pace of 7.3 percent in the first quarter of the year from 0.5 percent in the same quarter last year prompting economic managers through the Cabinet-level Development Budget Coordination Committee (DBCC) to raise the GDP target this year from a range of 2.6 percent to 3.6 percent.

For next year, the DBCC has penned a GDP growth target of between seven percent and eight percent.

Gunigundo said stronger economic growth would not result to higher inflation as the BSP has set an inflation target of 3.0 percent to 5.0 percent between 2012 and 2014.

“Higher economic growth will not necessarily lead to higher inflation,” he assured.

According to him, monetary authorities have put in place the necessary tools to ensure price stability.

Earlier, National Economic and Development Authority director general Cayetano Paderanga said efficient bureaucracy can spur the country’s economic growth for an average of eight percent until 2016. –Lawrence Agcaoili (The Philippine Star)