2010 growth to top official target -- gov’t

Business World

Economic growth will likely ease in the final three months of 2010 but the full-year target of 5.0-6.0% will still be exceeded, a Cabinet official said on Thursday.

Fourth-quarter gross domestic product (GDP) growth could moderate to at least 6% -- from the first, second and third quarter upticks of 7.8%, 7.9% and 6.5%, respectively -- for a 2010 average of a little over 7%, Socioeconomic Planning Secretary Cayetano W. Paderanga, Jr. told reporters.

"GDP (gross domestic product) expanded by 7.5% from January to September 2010, as industry and services cushioned the decline in agriculture which was adversely affected by El Niño. The growth in industry and services was largely fueled by both strong foreign and domestic demand," Mr. Paderanga said.

While multilateral institutions have forecast an easing of growth in 2011, he said the National Economic and Development Authority (NEDA) was keeping its 7.0-8.0% target.

NEDA Deputy-Director General Augusto B. Santos told BusinessWorld the government was counting on government spending, increased remittances from overseas Filipino workers, public-private partnerships (PPP) and growth in industries such as the business process outsourcing and the tourism sector.

"We’re expecting agriculture to rebound," he added.

For the rest of 2010 and next year, the manufacturing sector is seen to lead growth due to a rise in semiconductor production. Trade, meanwhile, would benefit from improvements on the global front, Mr. Paderanga forecast.

"Private services will be driven by robust growth in the offshoring and outsourcing industry and the momentum in tourism and construction will also be a driver, given the improved investor confidence and greater focus on infrastructure development," he added.

"With the Aquino administration focusing on improving the lives of Filipinos, we are aiming for high sustained growth. The targets that have been set will sharply reduce poverty incidence and increase per capita income," Mr. Paderanga claimed.

Economist Victor A. Abola of the University of Asia & the Pacific, however, warned that the government’s 2011 growth may not be achievable given the gestation period for infrastructure projects.

And while dollar remittances from overseas Filipino workers may continue to grow, these are being affected by a strong peso, he added.