BSP says GDP needs to grow by 10%

MANILA, Philippines – Monetary authorities stressed the need for the Philippines to expand its domestic output as measured by the gross domestic product (GDP) by at least 10 percent to catch up with its neighbors as the country continued to lag behind other countries in the region over the medium term. Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo told reporters that the Philippines is likely to lag behind neighboring countries over the medium term given the current planned growth trajectory. He pointed out that the country’s GDP should expand by at least 10 percent over the next few years so that the Philippines could catch up with the per capita income of neighboring countries including Indonesia, Thailand, and Malaysia. Citing data from the International Monetary Fund (IMF), Guinigundo said the ratio of the per capita GDP of the Philippines to that of Indonesia would stand at 0.87 percentage point this year , 0.9 percentage point next year, 0.92 percentage point by 2012, 0.94 percentage point by 2013, 0.96 percentage point by 2014, and 0.98 percentage point by 2015. The ratio of the country’s per capita income compared to that of Thailand is at 0.45 percentage point this year, 0.46 percentage point next year, 0.48 percentage point by 2012, 0.50 percentage point by 2013, 0.52 percentage point by 2014, and 0.54 percentage point by 2015 while the country’s ratio to that of Malaysia was lower at 0.27 percentage point this year, 0.28 percentage point next year, 0.29 percentage point by 2012, 0.30 percentage point by 2013, 0.32 percentage point by 2014, and 0.33 percentage point by 2015.

If the Philippines manages to expand its GDP from 2010 onwards, Guinigundo said the country would manage to catch up with the per capital income of Indonesia by 2015, Thailand by 2028, and Malaysia by 2038. Data showed the Philippines had a per capita income of $1,746 last year compared to Indonesia’s $2,329, Thailand’s $3,940, and Malaysia’s $6,897. Growing its GDP 10 percent per annum would be a tall order for the new government of President Aquino III.

The Cabinet-level Development Budget Coordination Committee (DBCC) has revised upwards the country’s GDP growth target to five percent to six percent instead of 2.6 percent to 3.6 percent this year and to seven percent to seven percent next year.

In the first quarter of the year, the country’s GDP growth zoomed to its fastest pace in almost three years after expanding by 7.3 percent compared to only 0.5 percent in the same quarter last year.

The Philippines barely escaped recession after its GDP growth slackened to 0.9 percent last year from 3.8 percent in 2008 due to the full impact of the global financial

crisis. However, the GDP of Thailand contracted by 2.3 percent while that of Malaysia retreated by 1.7 percent but Indonesia posted a GDP growth of 4.6 percent last year. –Lawrence Agcaoili (The Philippine Star)