The Bangko Sentral ng Pilipinas has expressed optimism that the economy was poised to again grow beyond 6 percent and exports to expand at a faster pace in 2013, citing favorable indicators so far this year.
The government has set its official growth target for the year at 6-7 percent. The BSP said that based on initial data gathered for the first quarter, the economy was on track to hitting the full-year target.
The BSP said there were early signs of increasing activity in the manufacturing sector and that this was likely to complement the services sector in fueling another robust growth for the economy.
BSP Deputy Governor Diwa Guinigundo cited the purchasing managers’ index (PMI), a key indicator of manufacturing activity, which stood above 50 percent as of the end of March. A reading above 50 percent indicates an expansion while a reading below the threshold manifests a contraction.
“We don’t have the official national income accounts data yet, but demand indicators continue to show good numbers,” Guinigundo told reporters.
He added that preliminary data showed that sales of electricity and vehicles were also up in the first quarter from a year ago.
Guinigundo also highlighted projections of an accelerated growth in China and India as well as the United States that could boost global demand. This, in turn, would benefit emerging markets like the Philippines in terms of higher export revenues, he said.
Last year, Philippine exports reached $51.99 billion, up 7.6 percent from 2011. Exports growth was below the official target of 10 percent but was described as decent by economists considering the anemic global demand, which resulted largely from the economic problems in the United States and the Europe.
Guinigundo said there was a good chance exports growth would beat last year’s 8 percent on account of a mild improvement in global demand. “If the global economy indeed improves this year, then our exports should be able to grow by at least 8 percent,” he said.
Guinigundo said the book-to-bill ratio as of March stood beyond 1, which indicated a rise in exports. The ratio shows the proportion of orders and potential deliveries in the future to past sales.
“Both China and India are expected to accelerate in terms of economic growth. The United States and Japan are expected to also grow. As such, we may expect that the global market will improve, even as the improvement could be gradual,” he said.
The Philippines last year grew by 6.6 percent, beating most projections and even the government’s own target of 5-6 percent.
Economists are agreed that the Philippines could sustain its healthy pace of growth. Nonetheless, they urged government to implement measures to help the robust growth of the economy translate into poverty reduction. The National Statistics Coordination Board earlier reported that poverty incidence in the first semester of 2012 remained significant at 27.9 percent.